Securities Law Alert, October 2013
This month’s Alert discusses the oral argument before the Supreme Court in the Stanford Ponzi scheme cases. At issue is the scope of the “in connection with” requirement for the preclusion of state law-based securities fraud class actions under the Securities Litigation Uniform Standards Act (“SLUSA”).
We also address a Ninth Circuit decision declining to apply a “novel” loss causation standard when securities are traded in inefficient markets, and a Tenth Circuit opinion applying the test set forth in Reves v. Ernst & Young, 494 U.S. 56 (1990) for determining whether a loan instrument qualifies as a “security” for purposes of the federal securities laws.
In addition, we cover a Southern District of Texas decision declining to dismiss English common law claims brought by purchasers of BP shares on the London Stock Exchange in connection with the Deepwater Horizon explosion. The court had previously dismissed Section 10(b) claims brought by the same plaintiffs based on the Supreme Court’s ruling in Morrison v. Nat’l Australia Bank Ltd., 130 S. Ct. 2869 (2010).
Finally, we discuss two decisions from the Delaware Chancery Court: one dismissing on statute of limitations grounds a shareholder action against Sirius XM Satellite Radio’s directors concerning Liberty Media Corporation’s 2009 capital infusion; and another dismissing a shareholder action against the directors of BioClinica, Inc. in connection with the March 2013 acquisition of BioClinica by JLL Partners.