As this Blog has noted previously, the courts (in New York and Delaware) have refused to approve the settlement of shareholder litigation where class members receive no financial benefit and are asked to give broad releases to the defendants that are inimical to their rights. The latest court to follow this path is the Supreme Court, New York County, Commercial Division. In Matter of Xerox Corp. Consol. Shareholder Litig. , 2019 N.Y. Slip Op. 51467(U) (Sept. 10, 2019), Justic

This Blog has often noted that “securities fraud comes in all shapes and sizes.” (E.g., here.) Though the alleged fraudulent scheme may differ, the types of schemes implemented tend to fall into one of the following (non-exclusive) categories: financial statement/accounting fraud; pyramid schemes; Ponzi schemes; pump-and-dump schemes; affinity fraud; promissory note fraud; Internet fraud; “microcap” stock fraud; and fraud concerning information about a company, its operations

A temporary receivership, which is one of the provisional remedies available during litigation, is governed by Article 64 of the CPLR. CPLR 6401 addresses the “appointment and powers” of a temporary receiver and provides, in pertinent part: (a) Appointment of temporary receiver; joinder of moving party. Upon motion of a person having an apparent interest in property which is the subject of an action in the supreme or a county court, a temporary receiver of the property may

The elements of a common law fraud claim in New York are well known to readers of this Blog: “a misrepresentation or a material omission of fact which was false and known to be false by the defendant, made for the purpose of inducing the other party to rely upon it, justifiable reliance of the other party on the misrepresentation or material omission, and injury.” Pasternack v. Laboratory Corp. of Am. Holdings , 27 N.Y.3d 817, 827 (2016) (internal citations and quotation mark

This Blog has often written about contract issues; in particular, the enforceability of a contract whether it be oral or written. In today’s post, we examine an implied contract – that is, an agreement arising from the conduct of the parties. In K2 Intelligence, LLC v. Frydman , 2019 N.Y. Slip Op. 32684(U) (Sup. Ct., N.Y. County Sept. 9, 2019) ( here ), the Court denied a motion to dismiss an implied contract action, holding that there was an issue of material fact as to whe

It is well settled that when an agreement is clear and unambiguous, the parties’ rights are to be governed exclusively by that agreement and the courts are to give the words of that agreement their plain, ordinary, and usual meaning. It is equally well-settled law that parties engaged in an arm's-length business transaction are not fiduciaries, especially when the parties are sophisticated businesspeople. Despite the clarity of these principles, they are, nevertheless, tested

In today’s post, this Blog looks at enforcements actions brought by the Securities and Exchange Commission (“SEC”) that involve fraudulent misconduct and the failure to comply with the registration requirements for the offering of securities. Securities and Exchange Commission v. Toon Goggles Inc. On September 6, 2019, the SEC announced ( here ) that it charged Toon Goggles Inc. (“Toon Goggles”), a Los Angeles-based company that offers on-demand entertainment content for chil

Attorneys are often asked whether an oral agreement is enforceable. Most will say that the answer depends on the law and the facts surrounding the agreement. As an initial matter, to be enforceable, an oral agreement must contain the elements of a binding contract, e.g. , an offer, acceptance, consideration, mutual assent, an intent to be bound, and agreement on all essential terms. Even if these elements are present, the agreement must still satisfy the Statute of Frauds.

On August 29, 2018, the Securities and Exchange Commission (”SEC”) announced (here) that it charged a Tallahassee-based investment advisory firm and its two former principals with defrauding investors, most of whom were retired NFL players who had joined the class-action lawsuit against the National Football League (“NFL”) claiming they suffered brain injuries as a result of concussions. The SEC charged Cambridge Capital Group Advisors, LLC (f/k/a Cambridge Capital Advisors,

Unscrupulous bookkeepers or other employees have great potential to embezzle money using forged or other types of bogus checks. In such instances, Article 4 of New York’s Uniform Commercial Code (“Bank Deposits and Collections”) is implicated. “Articles 3 and 4 of the UCC envisions a series of shifting burdens of risk with respect to forged checks.” Putnam Rolling Ladder Co. v. Manufacturers Hanover Trust Co. , 74 N.Y.2d 340, 345 (1989). Under Article 3 of the UCC, a chec

The title of this post captures the recent observation of Justice Joel M. Cohen of the Supreme Court, New York County, Commercial Division. In , 2019 N.Y. Slip Op. 32487(U) (Sup. Ct., N.Y. County Aug. 22, 2019) (here), Justice Cohen stated the following: “In many cases, arbitration is a quick and efficient way to resolve disputes with little or no court involvement. This is not one of those cases.” Slip Op. at *1, citing , 559 U.S. 662 (2010). Arbitration is an alternative f

New York’s Business Corporation Law (“BCL”) provides shareholders owning 50% or more of a corporation two paths to judicial dissolution: a) BCL § 1104 – deadlock at the board or shareholder level such that the corporation “cannot continue to function effectively, and no alternative exists but dissolution”; or b) BCL § 1104-a – where directors or those in control of the corporation have been guilty of illegal, fraudulent or oppressive actions toward the complaining shareholder

As readers of this Blog know, pleading and proving fraud is not easy. The law reporters (not to mention the pages of this Blog) are brimming with cases in which the courts have dismissed fraud actions due to pleading and proof deficiencies. Norddeutsche Landesbank Girozentrale v. Tilton , 2019 N.Y. Slip Op. 32470(U) (Sup. Ct., N.Y. County Aug. 20, 2019) ( here ), is a recent example of this phenomenon. In Norddeutsche , Plaintiffs contended that they were defrauded into inves

It is the end of summer. With Labor Day around the corner, people will be taking vacations or visiting family. Many will be traveling by airplane, train or cruise ship. To do so, they will need a ticket. Many travelers do not realize that their ticket is an important legal document. It not only allows the person to board the means of transportation, but often includes limitations and restrictions, affecting such matters as the forum for dispute resolution, choice of law, and

The location of the place of trial ( or venue) of a legal proceeding in New York State is the location where the action is brought. The plaintiff, as the party bringing the proceeding, generally gets to choose, in the first instance, venue. Plaintiffs, however, do not always choose a proper venue (“Improper Venue Selection”). In such instances, a defendant has an opportunity to change the Improper Venue Selection to a proper one. See CPLR 510 (1) . Other times, although

There is a broad presumption that the public is entitled to access to judicial proceedings and court records. Mosallem v. Berenson , 76 A.D.3d 345, 348 (1st Dept. 2010); Mancheski v. Gabelli Grp. Capital Partners , 39 A.D.3d 499, 501 (2d Dept. 2007); Gryphon Dom. VI, LLC v. APP Intl. Fin. Co., B.V. , 28 A.D.3d 322, 324 (1st Dept. 2006); Danco Labs. v. Chemical Works of Gedeon Richter , 274 A.D.2d 1, 6 (1st Dept. 2000). New York has “long recognized that civil actions and proc

Statutes of limitations are statutory mechanisms that limit the duration of a defendant’s liability for all types of alleged wrongdoing. Depending upon the circumstances, the statute of limitations can be an important topic of discussion between lawyer and client. As many practitioners know, there are exceptions to the general rule that the statute of limitations runs from the time of the tort or breach though no damage occurs until a later time. One exception that practition

It has been some time since this Blog has written an article about whistleblowers and qui tam actions. Those articles typically involved lawsuits arising under the Federal False Claims Act (“Federal False Claims Act”). In today’s post, this Blog looks at City of New York v. Siemens Elec., LLC , 2019 N.Y. Slip Op. 29251 (Sup. Ct., N.Y. County Aug. 7, 2019) ( here ), a qui tam action brought under the New York False Claims Act (“NYFCA”) ( here ) against, among others, Siemens