Kahn Swick & Foti prosecutes lawsuits on behalf of institutional and individual clients for stock fraud. The firm sues corporations who issue materially false and misleading statements to investors about the company’s financial condition and/or business prospects, thereby artificially inflating the price of the company’s stock. Ultimately, investors suffer losses when the truth is finally revealed and the stock falls on such news. KSF litigates both class actions and private/opt out actions depending on the amount of a client’s losses.
CURRENT CASES
- In Re Cloudera Securities Litigation, 5:19-cv-03221-LHK
Northern District of California
Lead Counsel - Abramson v. NewLink Genetics Corp., et al., 1:16-cv-03545-WHP
Southern District of New York
Lead Counsel - Bellingham v. Qudian Inc. et al., 1:20-cv-0577-GHW
Southern District of New York
Co-Lead Counsel - In re Chicago Bridge & Iron Co. N.V. Secs. Litig., 1:17-cv-1580-LGS
Southern District of New York
Lead Counsel - Dougherty v. Esperion Therapeutics, Inc., et al., No. 16-10089
Eastern District of Michigan
Co-Lead Counsel - Ikeda v. Baidu, Inc., No. 5:20-cv-2768
Northern District of California
Lead Counsel - Kavra v. Health Insurance Innovations, Inc. et al., Case No. 8:17-cv-02186-EAK-MAP
Middle District of Florida
Lead Counsel - Kanefsky v. Honeywell International Inc. et al., Case No. 2:18-cv-15536-WJM-JAD
District of New Jersey
Lead Counsel - In re Orexigen Therapeutics, Inc., Securities Litigation, 15cv540 L (KSC)
Southern District of California
Lead Counsel - In re Pareteum Securities Litigation, Case No. 1:19-cv-09767-AKH-GWG
Southern District of New York
Lead Counsel - Hogan v. Pilgrim’s Pride Corp., et al., 1:16-cv-02611-RBJ
District of Colorado
Lead Counsel - Pearlstein v. Blackberry Ltd., et al., 1:13-CV-07060-TPG
Southern District of New York
Lead Counsel - Shawanaz v. Intellipharmaceutics Int’l Inc., et al., No. 1:17-cv-5761-JPO
Southern District of New York
Lead Counsel - Welch v. Meaux, et al., No. 19-1260
Western District of Louisiana
Lead Counsel
RECENT VICTORIES
Abramson v. NewLink Genetics Corp., 2020 U.S. App. LEXIS 21545, at *3 (2d Cir. July 13, 2020). On July 13, 2020, a three-judge panel for the Second Circuit Court of Appeals vacated in part the dismissal order of Hon. William H. Pauley III, reviving investors’ Exchange Act claims against NewLink Genetics Corp. The detailed 26-page opinion written by Hon. John M. Walker, Jr., and designated for publication, holds that “Plaintiffs plausibly pled material misrepresentation and loss causation for Defendants’ statements about the scientific literature and the design of their clinical trial,” contrary to the holding of the district court. Notably, the Second Circuit credited KSF’s loss causation theory as “persuasive” and “compelling,” and provided significant development on this element of securities fraud cases going forward. Id. at *28.
Dougherty v. Esperion Therapeutics, Inc., et al., No. 2:16-cv-10089 (E.D. Mich.). On May 31, 2020 the Honorable R. Steven Whalen recommended certifying a class of shareholders in a securities fraud class action brought against Esperion Therapeutics, Inc. and the Company’s CEO. The allegations of the case involve Defendants’ materially misleading statements and omissions concerning a cardiovascular outcomes trial for the Company’s lead drug candidate. The Court, recommending appointment of KSF as co-class counsel alongside another firm, noted “counsel’s diligent prosecution of this case to date, including a win in the Sixth Circuit,” and highlighted KSF’s “significant collective experience in class litigation.” Judge Whalen recommended a certified Class including: “All persons who purchased or otherwise acquired the common stock of Esperion Therapeutics, Inc. between August 18, 2015 and September 28, 2015 (inclusive) and were damaged thereby.”
Kanefsky v. Honeywell International Inc. et al., Case No. 2:18-cv-15536-WJM-JAD (D. N.J.). On May 18, 2020, Hon. William J. Martini, United States District Judge for the District of New Jersey, entered an Order denying Defendants’ motion to dismiss against Honeywell, and individual defendants Darius Adamczyk, and Thomas A. Szlosek. A third individual defendant was dismissed from the action. This matter, in which Kahn Swick & Foti is Lead Counsel, alleges that Defendants made materially false and misleading statements and failed to disclose material information regarding Honeywell’s liabilities relating to former subsidiary Bendix Friction Materials’ use of asbestos in certain automotive products. The matter further alleges that when the truth was finally brought to light on October 19, 2018 (after Honeywell released its quarterly report for the third quarter of 2018), the stock fell from an opening price of $151.25 per share to $140.83 per share as of market close on October 24, 2018. Judge Martini agreed, finding Lead Plaintiff’s “alleged facts raise a strong inference of scienter.”
In re Chicago Bridge & Iron Co. N.V. Secs. Litig., Case No. 1:17-cv-1580-LGS (S.D.N.Y). On March 23, 2020, the Honorable Lorna G. Schofield certified a class of shareholders of Chicago Bridge & Iron Company N.V. (“CB&I”) in a lawsuit arising from Defendants’ alleged material misrepresentations and omissions regarding the performance of, and accounting relating to, CB&I’s nuclear business. The case is In re Chicago Bridge & Iron Company N.V. Securities Litigation, No. 1:17-cv-1580, pending in the United States District Court for the Southern District of New York. Judge Schofield appointed KSF as Class Counsel and certified a Class of investors that includes purchasers of common stock of Chicago Bridge & Iron Company N.V. on the NYSE during a Class Period from October 30, 2013, through June 23, 2015, excluding Defendants and their affiliates.
In Re Health Insurance Innovations., No. 8:17-cv-2186 (M.D. Fla). On June 28, 2019, the Hon. Elizabeth A. Kovachevich, United States District Court Judge for the Middle District of Florida, entered an Order denying, in part, defendants’ motion to dismiss. This matter, in which Kahn, Swick & Foti is lead counsel, alleges that Health Insurance Innovations (“HII’s”) Quarterly Report for the Second Quarter of 2017 was misleading because it (i) conveyed the false impression that HII would not need a third party administrator (“TPA”) license to conduct its third-party insurance business in its home state of Florida and, (ii) misrepresented the reasons that the Florida Office of Insurance Regulation denied its application for a TPA license. Judge Kovachevitch agreed and also found the “pleaded facts demonstrate a strong inference that [Defendant Chief Financial Officer Michael] Hershberger acted with the requisite state of mind with respect to each act or omission alleged to violate the Exchange Act.”
Dougherty v. Esperion Therapeutics, Inc., et al., No. 17-1701 (6th Cir.). On September 27, 2018, the Sixth Circuit Court of Appeals reversed and remanded the lower court’s dismissal of the securities class action filed on behalf of a putative class of Esperion Therapeutics, Inc. investors. In a decision written by Senior Circuit Judge Eugene Edward Siler, Jr., the Sixth Circuit held that the district court erred by concluding that lead plaintiffs had not adequately alleged scienter, stating that, “Esperion has offered no innocent inference stronger than Plaintiffs’ inference that Esperion knowingly or recklessly made material misrepresentations or omissions in its [] communications with investors.” The Court further held that defendants’ “innocent inference” explanations were either implausible or actually supported lead plaintiffs’ allegation of recklessness.
Khoja v. Orexigen Therapeutics, Inc. et al., No.16-56069 (9th Circuit). On August 13, 2018, the Ninth Circuit Court of Appeals handed lead plaintiff a major win when it overturned much of the lower court’s order dismissing all claims against Defendant Orexigen Therapeutics, Inc. In a detailed 59-page opinion written by Judge A. Wallace Tashima and designated for publication, the Court found that the trial court, “in dismissing the action” had “abused its discretion by improperly considering materials outside of the complaint.” Noting a “concerning pattern in securities cases like this one” – where defendants improperly “exploit[]” the incorporation-by-reference doctrine and judicial notice procedure – the Court stated that this opinion aimed to “clarify” these procedures.
Settled Cases
Erica P. John Fund, Inc. v. Halliburton Co., et al., No. 3:02-cv-1152 (N.D. Tex.). Co-Class Counsel, federal securities class action against oilfield services company and a high-level officer, in which Class Counsel obtained a unanimous decision by the U.S. Supreme Court in Erica P. John Fund, Inc. v. Halliburton Co., et al., 563 U.S. 804 (2011) vacating and remanding a decision of the Fifth Circuit, and then successfully defeated Defendants’ attack on the Basic v. Levinson presumption of reliance in Halliburton Co. v. Erica P. John Fund, Inc., 134 S. Ct. 2398 (2014). These two Supreme Court decisions led to certification of the class, and ultimately resulted in a cash settlement of $100 million for investors.
In re Petrobras Securities Litigation, No. 1:14-cv-9662 (S.D.N.Y.). Member of Plaintiffs’ Steering Committee for the Individual Actions (“PSC”), federal securities class action against Brazil’s state-controlled petrochemical company arising from “Operação Lava Jato,” the largest corruption scandal in the history of Latin America, whereby Plaintiffs alleged Defendants deliberately overpaid on various construction contracts in return for kickbacks. The Class action settled in 2018 for $3 billion and, as a member of the PSC, KSF was found by the Court to have “made a substantial contribution to the class,” June 22, 2018 Opinion and Order at 39 (D.E. 834).
Dr. Joseph F. Kasper, et. al. v. AAC Holdings, Inc., et. al., 3:15-cv-00923 (Consolidated) (M.D. Tenn.). Co-Lead Counsel, federal securities class action against a for-profit substance abuse treatment provider, and certain officers and directors, arising from Defendants’ misleading statements regarding a criminal investigation into the death of a patient, resulting in a settlement of $25 million for investors.
In re Virgin Mobile USA IPO Litigation, 2:07-cv-05619-SDW-MCA (D.N.J.), Co-Lead Counsel, federal securities IPO-related class action against a company providing wireless communication services, certain officers and directors, certain controlling shareholder entities, and Virgin’s underwriters, resulting in a cash settlement of $19.5 million for investors.
In Re Eletrobras Securities Litigation, Case No. 1:15-cv-05754 (Consolidated) (S.D.N.Y.). Co-Lead Counsel, federal securities class action against Centrais Eletricas Brasileiras S.A. and several of its former directors and officers, by U.S. investors after the company reported large losses related to a sprawling corruption scandal in Brazil. Nearly three years of protracted litigation resulted in a settlement of $14.75 million for investors.
In re Tesco PLC Securities Litigation, 14 Civ. 8495 (RMB) (S.D.N.Y.), Lead Counsel, federal securities class action against one of the world’s largest grocery and general merchandise retailers based in the U.K., resulting in an all-cash settlement of $12 million for investors in ADRs and F shares in the United States.
In re BigBand Networks, Inc Securities Litigation, 3:07-CV-05101-SBA (C.D. Cal.), Co-Lead Counsel, federal securities class action brought against a computer hardware corporation, certain officers and directors of the Company, and the Company’s Underwriters, resulting in a cash settlement of $11 million for investors.
In re U.S. Auto Parts Networks, Inc. Securities Litigation, 2:07-cv-02030-GW-JC (C.D. Cal.), Lead Counsel, federal securities IPO-related class action against an online automotive supply company, certain members of its board of directors, and its underwriters, resulting in a cash settlement of $10 million for investors.
In re CytRx Corp. Securities Litigation, 2:14-CV-01956-GHK (PJWx) (C.D. Cal.), Lead Counsel, federal securities class action brought against biotechnology corporation, certain officers and directors of the Company, and the Company’s Underwriters, resulting in a settlement of $8.5 million for investors.
In re Rocket Fuel, Inc. Securities Litigation, 4:14-cv-03998-PJH (N.D. Cal.). Co-Class Counsel, federal securities class action against a digital advertising technologies company and certain of its officers and directors, resulting in a cash settlement of $3.15 million for investors.
In re ShoreTel, Inc. Securities Litigation, 3:08-cv-00271-CRB (N.D. Cal.), Lead Counsel, federal securities IPO-related class action brought against an Internet protocol telecommunications company, certain of its officers and directors, and its underwriters, resulting in a cash settlement of $3 million for investors.