Court Tosses Suit Over Self-Reported Exec Misconduct at LendingClub

A derivative action against online loan platform LendingClub Corp. alleging that the company’s board of directors breached its fiduciary duties was dismissed in Delaware Chancery Court  after investors failed to prove that the board acted in bad faith after self-reporting misconduct to the Securities and Exchange Commission. 

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Vice Chancellor Dismisses Shareholder Claim against CEO for Alleged Compensation Conflict in $18B Merger

(CN) – The Delaware Chancery Court dismissed a class action in its entirety after shareholders failed to state a claim for breach of fiduciary duty in challenging an $18 billion merger between Tower Watson & Co. and Willis Group Holdings PLC because of a potential conflict in the compensation of Tower’s CEO.

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D.C. Circuit Tosses State Republicans’ Challenge of SEC Political Contributions Rule for FINRA Broker-Dealers

(CN) – The Court of Appeals for the D.C. Circuit denied the New York Republican State Committee’s bid to challenge the Securities Exchange Commission’s rule prohibiting broker-dealers acting as “placement agents” from accepting compensation for soliciting government business from candidates and elected officials.

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5th Circuit Tosses District Court’s Approval of Stanford Ponzi Settlement with Insurers and Receiver

(CN) – The Fifth Circuit found a district court lacked authority to approve a global settlement between the receiver appointed over Stanford International Bank and insurance underwriters after the collapse of R. Allen Stanford’s $5 billion Ponzi scheme. 

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Earthstone Energy Shareholders Score Partial Victory in Delaware Supreme Court

(CN) – The Delaware Supreme Court ruled in favor of oil and gas firm Earthstone Energy Inc., tossing shareholders’ claims that the company misled them into approving an unfair transaction between Earthstone and Bold Energy III LLC, but the court stopped short from killing the case altogether.

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Appeals Court Reverses Order to Make Lenders Whole After Oil Company Bounces Back After Bankruptcy

A Fifth Circuit panel reversed a bankruptcy ruling that required Ultra Petroleum Corp. to pay roughly $400 million to creditors after the company pulled out of Chapter 11 bankruptcy proceedings in an emergence the judge called “anomalous.”

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Fannie, Freddie Shareholder Suit Faces En Banc Review

The Fifth Circuit Court of Appeals agreed to rehear an action by Fannie Mae and Freddie Mac shareholders after a divided three-judge panel concluded that the Federal Housing Finance Agency (FHFA) was unconstitutional.

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Second Circuit Says Convicted Fraudster Can’t Claim Double Jeopardy in RICO Case

The Second Circuit upheld the 2016 conviction of fraudster Mikhail Zemlyansky after he unsuccessfully argued that double jeopardy applied to his Racketeer Influenced and Corrupt Organizations Act case involving a multi-million dollar insurance and securities fraud scheme.

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Appellate Panel Tosses Challenge to CFTC Action After Settlement with Private Regulator

(CN) – The 11th Circuit ruled that an action brought by a self-regulatory commission does not preclude subsequent action by a government regulatory agency after an appeal by Southern Trust Metals Inc., which was found guilty of fraud for misleading customers about metal commodities purchases and charging interest on fraudulent loans.

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11th Circuit Punts State Republicans’ Challenge of FINRA Rule to D.C.

The 11th Circuit punted two state Republican party organizations’ challenge to a Financial Industry Regulatory Authority rule governing political contributions to the D.C. Circuit, and dismissed a third for lack of jurisdiction.

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