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Compliance Hotline
PSLRA Pleading Requirements Not Altered by SOX
The Eleventh Circuit has dismissed a pension fund's securities fraud complaint ruling that it did not contain the requisite specificity for pleading scienter under the 1995 Private Securities Litigation Reform Act. In particular, the court held that 'channel stuffing' is not per se a fraudulent act and that that the personal certifications of senior executives required by the Sarbanes-Oxley Act (SOX) are not indicia of their actionable scienter. Garfield v. NDC Health Corp., No. 05-14765 (Oct 12).
The plaintiff filed a securities fraud complaint against a health information company alleging that its officers fraudulently misstated the company's revenues by engaging in 'channel stuffing,' which is a practice whereby a company floods the distribution channels by employing incentives to induce customers into purchasing their products in large quantities, creating a short-term bump in revenue and excess supply in the distribution chain. This practice, the suit claimed, caused material misstatements in the defendant's financial statements. The district court dismissed the initial complaint as well as a second amended complaint for failing to plead fraud with the particularity as required by F.R.C.P. 9(b) and the PSLRA. The plaintiff then appealed to the circuit court rather than seeking leave to file another timely amended complaint. The appeals court ruled that by seeking this appeal, the plaintiff also waived its future right to file another amended complaint.
Major Differences In UK, U.S. Copyright Laws
This article highlights how copyright law in the United Kingdom differs from U.S. copyright law, and points out differences that may be crucial to entertainment and media businesses familiar with U.S law that are interested in operating in the United Kingdom or under UK law. The article also briefly addresses contrasts in UK and U.S. trademark law.
The Article 8 Opt In
The Article 8 opt-in election adds an additional layer of complexity to the already labyrinthine rules governing perfection of security interests under the UCC. A lender that is unaware of the nuances created by the opt in (may find its security interest vulnerable to being primed by another party that has taken steps to perfect in a superior manner under the circumstances.
Strategy vs. Tactics: Two Sides of a Difficult Coin
With each successive large-scale cyber attack, it is slowly becoming clear that ransomware attacks are targeting the critical infrastructure of the most powerful country on the planet. Understanding the strategy, and tactics of our opponents, as well as the strategy and the tactics we implement as a response are vital to victory.
Removing Restrictive Covenants In New York
In Rockwell v. Despart, the New York Supreme Court, Third Department, recently revisited a recurring question: When may a landowner seek judicial removal of a covenant restricting use of her land?
Legal Possession: What Does It Mean?
Possession of real property is a matter of physical fact. Having the right or legal entitlement to possession is not "possession," possession is "the fact of having or holding property in one's power." That power means having physical dominion and control over the property.