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Court weighs securities fraud class-action cases
Topics in Legal News |
2014/03/05 15:07
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The Supreme Court is considering whether to abandon a quarter-century of precedent and make it tougher for investors to band together to sue corporations for securities fraud.
The justices hear arguments Wednesday in an appeal by Halliburton Co. that seeks to block a class-action lawsuit claiming the energy services company inflated its stock price.
A group of investors says it lost money when Halliburton's stock price dropped after revelations the company misrepresented revenues, understated its liability in asbestos litigation and overstated the benefits of a merger.
Justices threw out the company's first attempt to block the lawsuit in 2011. But Halliburton is now urging the court to overturn a 25-year-old decision that sparked a tidal wave of securities-related, class-action lawsuits against publicly traded companies and has led to billions in settlements.
The court's 1988 decision in Basic v. Levinson says shareholders who claim they were defrauded by false statements in securities filings don't have to prove they actually relied on the statements. Rather, the court reasoned that any misrepresentation would be reflected in the current stock price. Even if investors are not aware of the misstatements, they are presumed to be aware of them because they affect the stock price.
This presumption, known as the "fraud-on-the-market theory," has become the driving force for modern class-action securities cases. But some economists have questioned whether this theory makes sense anymore, saying it doesn't account for the sometimes random and arbitrary nature of stock trading. |
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SKorea court invalidates Ssangyong layoffs
Topics in Legal News |
2014/02/10 15:14
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A South Korean appeal court said the layoff of 153 employees at Ssangyong Motor Co. in 2009 was unjustified, in a belated victory for auto workers who fought pitched battles with riot police at the time.
The 153 were among 2,600 workers that Ssangyong tried to shed in 2009, sparking South Korea's worst labor strife in years. A spate of suicides among Ssangyong workers and family members followed the automaker's restructuring.
If Supreme Court of Korea upholds the ruling, the workers will be able to return to the company now owned by Indian conglomerate Mahindra & Mahindra Ltd.
The appeal court said Friday the layoffs in 2009 could not be justified because it was not clear that the job cuts were vital to Ssangyong's survival.
To justify the layoffs, Ssangyong exaggerated its losses by under-reporting auto sales and omitting future cash-flow from new models, the court said in a statement.
The maker of SUVs and luxury sedans was hit by the 2008 financial crisis and slumping sales, but Judge Cho Hae-hyeon said the automaker did not go to sufficient lengths to save jobs.
Kwon Young-gook, the attorney who represented former Ssangyong workers, said the unexpected ruling was a victory for justice.
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7 now guilty in Pendleton contractor bribery case
Topics in Legal News |
2014/02/03 16:17
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Two civilian defense contractors have pleaded guilty in a San Diego federal court, bringing to nine the number of defendants who have admitted guilt in recent days to their involvement in a scheme involving bribes and kickbacks at Camp Pendleton and other federal facilities.
Federal prosecutors say Paul Dana Kay of PK Excavation and Manuel Ramirez of MRN Construction, Inc., entered the pleas to violations of the Anti-Kickback Act on Friday.
Six former contractors and a former Defense Department employee have pleaded guilty in the past two weeks to involvement in the scheme.
They include Natividad Lara Cervantes, who referred to himself as "The Godfather of Camp Pendleton," and admitted accepting bribes.
Sentencing is scheduled for April. The defendants face maximums ranging from three years to 20 years in prison. |
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High court rules against steelworkers' claim
Topics in Legal News |
2014/01/27 14:38
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The Supreme Court says steelworkers do not have to be paid for time they spend putting on and taking off protective gear they wear on the job.
The court was unanimous Monday in ruling in favor of United States Steel Corp. over workers' claims that they should be paid under the terms of federal labor law for the time it takes them to put on flame-retardant jackets and pants, safety glasses, earplugs, hardhats and other equipment.
Justice Antonin Scalia said for the court that the labor agreement between the company and the workers' union says the employees don't get paid for time spent changing clothes. Scalia said most of the items count as clothing. He said earplugs, glasses and respirators are not clothing, but take little time to put on. |
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Court hearings for 2 arrested in student stabbing
Topics in Legal News |
2014/01/20 14:43
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A 23-year-old man and a 16-year-old boy arrested in the stabbing of a Seattle University student have been ordered held after initial court appearances.
The Seattle Times reports that bail for the man was set Thursday at $1 million while the teen was ordered held in juvenile custody. Prosecutors say they expect to file charges Friday.
A 16-year-old girl arrested in the attack early Wednesday was released pending further investigation.
The suspects were arrested for investigation of robbery and assault. Police allege they followed a 23-year-old student, pushed him to the ground and stabbed him in the chest. He called for help from an emergency kiosk on campus. The student was hospitalized in serious condition.
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