Posts in Case Summaries
Freedom Watch, Inc. v. Google, Inc.: Plaintiff’s Claim of Suppressed Speech Fails to State a Claim on Which Relief Can be Granted.

In Freedom Watch, Inc. et al., v. Google, Inc. et al, No. 1:18-cv-02030, 2019 WL 1201549 (D.C. Cir. 2019), Freedom Watch, Inc., a non-profit public interest organization (“Freedom Watch”) and Laura Lommer, a social media user (collectively, the “Plaintiffs”) brought an action in the United States District Court for the District of Columbia against Google, Inc., Facebook, Inc., Twitter, Inc., and Apple, Inc. (collectively, the  “Defendants”) alleging that Defendants worked together to intentionally and willfully suppress politically conservative content. The Defendants filed a motion to dismiss for lack of standing and for “failure to state a claim upon which relief can be granted.” The court granted the motion, stating that the Plaintiffs have failed to tie their concerns to colorable legal claims.  

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SEC v. River North Equity LLC

On March 11, 2019, the Securities and Exchange Commission (“SEC”) filed a complaint containing a multitude of charges related to an alleged illegal stock distribution and market manipulation scheme  against David Foley and others. See complaint. The complaint identifies four groups of defendants: David R. Foley, Lisa L. Foley, and Jeffrey A. Foley (collectively, the “Stock Issuers”); Nanotech Entertainment, Inc. (“NTEK”) and Nanotech Gaming, Inc. (“NTGL”), affiliates of the Stock Issuers; Bernnie L. Blankenship (the “Stock Promoter”); and River North Equity LLC, Edward M. Liceaga, and Michael A. Chavez, the unregistered broker-dealers.

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Akorn, Inc. v. Fresenius Kabi AG: Suit for Specific Performance of Merger Agreement

In Akorn, Inc. v. Fresenius Kabi AG (Del. Ch. 2018 WL 4719347), the plaintiff pharmaceutical company (“Akorn”) brought suit against Fresenius seeking specific performance of its signed merger agreement. Fresenius argued it was permitted to terminate the merger agreement because Akorn’s actions, performance, and misrepresentations following execution of the agreement constituted a materially adverse effect (“MAE”) under the terms of the merger agreement and thus excused Fresenius’s obligation to perform. The court held that Fresenius legally terminated its merger agreement with Akorn because: (1) Akorn made material misrepresentations with regard to its business operations and the status of its regulatory compliance before the closing date, (2) Akorn did not materially comply with or perform its obligations under the merger agreement prior to the effective closing date, and (3) Akorn suffered a general MAE that allowed Fresenius to terminate the agreement.

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SEC v. Catlin Cade, IV

In SEC v. Cade, No. 2:18-cv-01323-JEO (N.D. Ala. Aug. 17, 2018), the SEC filed an initial complaint against Catlin Cade (“defendant”) alleging a violation of Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) and SEC Rule 10b-5 by trading shares of Golden Enterprises, Inc. (“Golden”) on the basis of material nonpublic information.

According to the allegations, a director of Golden learned of nonpublic information pertaining to a contemplated merger between Golden and a second company. The director separately owned and controlled a different privately held company (“Director’s Company”)

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SEC Investigation of Elon Musk

On August 7, Elon Musk made an abrupt announcement regarding his plan to take Tesla private. Mr. Musk claimed that this Twitter announcement came after he had “secured” funding from the Saudi Arabian sovereign wealth fund. (Ben Bain and Matt Robinson, Bloomberg). After the announcement, Tesla’s shares rose in value to over $381 per share, from $342 (the closing price on August 6). (Mark Matousek, Business Insider). Nevertheless, the share price dropped dramatically over the next few weeks to as low as $263 on September 7.

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SEC v. Chang - Complaint

On September 20, 2017, the Securities and Exchange Commission (“SEC”) filed a complaint (“Complaint”) against Peter C. Chang (“Chang”), alleging Chang violated Sections 10(b), 14(e), and 16(a) of the Exchange Act and Rules 10b-5, 14e-3, and 16a-3 thereunder. The SEC asserted Chang knowingly engaged in an insider-trading scheme and failed to disclose his ownership of securities in accordance with federal securities laws.

According to the Complaint, Chang served as the Chief Executive Officer, Chairman of the Board, and President of Alliance Fiber Optic Products, Inc. (“AFOP”) from its formation in 1995 until its acquisition by Corning, Inc. (“Corning”) in 2016.

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