Institutional Investor Class Action Recovery

Class Plaintiffs in the case of In re Foreign Exchange Benchmark Rates AntiTrust Litigation alleged that Defendant banks conspired to fix prices in the foreign exchange (“FX”) market in violation of Sections 1 and 3 of the Sherman Antitrust Act.  All but one of the Defendant banks settled several years ago for a total of $2.3 billion.  Defendant Credit Suisse decided to proceed to trial, and on October 20, 2022, a Manhattan federal jury found that Credit Suisse played no part in a conspiracy to fix the foreign currency exchange market. 

On January 3, 2023, the First Circuit released an opinion that provides a straightforward analysis of the legal standards for determining if statements are non-actionable opinions, as well as the viability of materiality and scienter defenses.

Crypto litigation, fueled by a surge of investors and market volatility, has ballooned in recent years.  For example, numerous securities class actions and government subpoenas followed the May 2022 collapse of the $60 billion Terra network, along with stablecoin TerraUSD and the LUNA token.

On September 15, 2021, the United States District Court for the Northern District of California issued an order regarding a burdensome opt out provision in SEB Investment Management AB v. Symantec Corp. Presumably to make it easier for the parties to track a blow-up provision in the settlement, the proposed class settlement notice provided that investors wishing to opt out supply, among other things, holdings and transaction details.

The United States District Court of the District of Connecticut will soon decide whether a putative class member may intervene “for the limited purpose of tolling the statute of repose.” Statutes of repose place an outer limit on when a claim can be brought. For example, claims brought under Sections 11 and 12 of the Securities Act of 1933 are subject to a 3-year statute of repose, 15 U.S.C. § 77m, and claims brought under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 are subject to a 5-year statute of repose. 15 U.S.C. § 1658. Less than two-years ago, the U.S. Supreme Court held that unlike statutes of limitations, which may be tolled by the pendency of a class action, statutes of repose cannot be so equitably tolled. CALPERS v. ANZ Securities. Should the District Court deny the motion, the putative class member, who purchased millions of Teva shares during the proposed class period will be time-barred from opting-out of the securities class action at-issue or asserting its own claims should the action be dismissed.

Last week, executives of the now-defunct biotechnology company, Orexigen filed a petition for certiorari before the U.S. Supreme Court, seeking clarification of the duty to update under the federal securities laws. The petition seeks further review of a recent decision by the Ninth Circuit, Khoja v. Orexigen Therapeutics, Inc., 899 F.3d 988 (9th Cir. 2018), which not only created a departure from other courts in its narrow-approach to incorporation by reference and judicial notice, but according to Orexigen, also distinguished itself from other Circuit Courts by being the first Circuit Court to find that an issuer owes a duty to update a statement of historical fact that was accurate when made. Specifically, the Ninth Circuit held that “by touting and publishing the ‘surprisingly’ positive 25 percent interim results [of the drug at-issue’s ability to decrease cardiovascular events], Orexigen created its own obligation to report that those results did not pan out after all” as evidenced by the 50 percent interim results.