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Court weighs securities fraud class-action cases
Headline Court News |
2014/03/05 13:09
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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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California court: Drivers can read cellphone maps
Headline Court News |
2014/03/05 13:09
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Drivers in California can legally read a map on their hand-held cellphones while behind the wheel, a state appeals court ruled Thursday.
The 5th District Court of Appeal reversed the case of a Fresno man who was ticketed in January 2012 for looking at a map on his iPhone 4 while stuck in traffic. The driver, Steven Spriggs, challenged the $165 fine.
But Spriggs said he's no champion of those who think they can get away with cruising down the road while staring at their phone or engaging in other such dangerous behavior. Spriggs would like the law that ensnared him to be rewritten so officers can do their job unencumbered.
"We're distracted all the time," he said. "If our distractions cause us to drive erratically, we should be arrested for driving erratically."
It's personal for Spriggs, whose son suffered a broken leg from a driver who was chatting on a cellphone. Spriggs said he uses a hands-free device to talk and drive.
The incident that ensnared Spriggs happened when he was stopped by roadwork. He had grabbed his cellphone to find an alternate route when a California Highway Patrol officer on a motorcycle spotted him and wrote the ticket.
Spriggs first challenged the case in traffic court, where he lost, and then appealed it himself to a three-judge panel in Fresno County Superior Court, where he lost a second time. |
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Court: School ban of US flag shirts allowed
Press Release |
2014/02/28 14:29
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A Northern California high school's decision to order students wearing American flag T-shirts to turn the garments inside out during a celebration of the holiday Cinco de Mayo was appropriate, a federal appeals court ruled Thursday.
The 9th U.S. Circuit Court of Appeals said the school officials' concerns of racial violence outweighed students' freedom of expression rights. Administrators feared the American-flag shirts would enflame the passions of Latino students celebrating the Mexican holiday. Live Oak High School, in the San Jose suburb of Morgan Hill, had a history of problems between white and Latino students on that day.
The unanimous three-judge panel said past problems gave school officials sufficient and justifiable reasons for their actions. The court said schools have wide latitude in curbing certain civil rights to ensure campus safety.
"Our role is not to second-guess the decision to have a Cinco de Mayo celebration or the precautions put in place to avoid violence," Judge M. Margaret McKeown wrote for the panel. The past events "made it reasonable for school officials to proceed as though the threat of a potentially violent disturbance was real," she wrote.
The case garnered national attention as many expressed outrage that students were barred from wearing patriotic clothing. The Ann Arbor, Mich.-based American Freedom Law Center, a politically conservative legal aid foundation, and other similar organizations took up the students' case and sued the high school and the school district.
William Becker, one of the lawyers representing the students, said he plans to ask a special 11-judge panel of the appeals court to rehear the case. Becker said he would appeal to the U.S. Supreme Court if he loses again. |
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Supreme Court allows Stanford Ponzi scheme suits
Headline Topics |
2014/02/28 14:11
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The Supreme Court ruled Wednesday that victims of former Texas tycoon R. Allen Stanford's massive Ponzi scheme can go forward with class-action lawsuits against the law firms, accountants and investment companies that allegedly aided the $7.2 billion fraud.
The decision is a loss for firms that claimed federal securities law insulated them from state class-action lawsuits and sought to have the cases thrown out. But it offers another avenue for more than 21,000 of Stanford's bilked investors to try to recover their lost savings.
Federal law says class-action lawsuits related to securities fraud cannot be filed under state law, as these cases were. But a federal appeals court said the cases could move forward because the main part of the fraud involved certificates of deposit, not stocks and other securities.
The high court agreed in a 7-2 decision, with the two dissenting justices warning that the ruling would lead to an explosion of state class-action lawsuits.
Stanford was sentenced to 110 years in prison after being convicted of bilking investors in a $7.2 billion scheme that involved the sale of fraudulent certificates of deposits from the Stanford International Bank. They supposedly were backed by safe investments in securities issued by governments, multinational companies and international banks, but those investments did not exist. |
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Moscow court sends 7 to prison for protest rally
Headline Topics |
2014/02/24 14:31
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A Russian court handed down prison sentences Monday of up to four years for seven people who took part in a 2012 protest against Vladimir Putin. An eighth defendant received a suspended sentence.
Hundreds of their supporters gathered outside the courthouse to condemn the trial and the Kremlin's crackdown on opposition. Police detained about 200 of them, accusing them of violating public order.
Among those detained were members of the punk band Pussy Riot who had spent nearly two years in prison as punishment for their own anti-Putin protest.
The defendants sentenced Monday were among 28 people rounded up after the May 6, 2012, protest on the eve of Putin's inauguration for a third presidential term. The rally turned violent after police restricted access to Bolotnaya Square, across the river from the Kremlin, where the protesters had permission to gather.
The eight defendants were found guilty last week, but sentencing was postponed until Monday. All have been in custody for nearly two years except for Anastasia Dukhanina, 20, who was under house arrest. She was given a suspended sentence. |
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High court climate case looks at EPA's power
Headline Topics |
2014/02/24 14:30
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Industry groups and Republican-led states are heading an attack at the Supreme Court against the Obama administration's sole means of trying to limit power-plant and factory emissions of gases blamed for global warming.
As President Barack Obama pledges to act on environmental and other matters when Congress doesn't, or won't, opponents of regulating carbon dioxide and other heat-trapping gases cast the rule as a power grab of historic proportions.
The court is hearing arguments Monday about a small but important piece of the Environmental Protection Agency's plans to cut the emissions — a requirement that companies expanding industrial facilities or building new ones that would increase overall pollution must also evaluate ways to reduce the carbon they release.
Environmental groups and even some of their opponents say that whatever the court decides, EPA still will be able to move forward with broader plans to set emission standards for greenhouse gases for new and existing power plants.
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Gov. Snyder signs jury duty, trampoline court laws
Headline Court News |
2014/02/20 14:08
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Michigan Gov. Rick Snyder has signed a law letting full-time college students postpone jury duty until the end of the school year.
The governor on Tuesday also approved rules for indoor trampoline parks where adults and kids can bounce around for a fee.
Snyder says jury duty is "an important part of our civil responsibility" but can be disruptive to college students' studies. A similar exemption already exists for high school students.
The other law requires trampoline courts to publicly display rules and inform customers of the activity's inherent dangers. Trampoliners also must adhere to rules specified in the law.
A trampoline user, spectator or operator who violates the law is liable for damages in civil lawsuits. |
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