Richard J. Holwell

In United States v. Rajaratnam, a jury convicted the defendant of five counts of conspiracy to commit securities fraud and nine counts of securities fraud arising from insider trading. Rajaratnam renewed his motion under Federal Rule of Criminal Procedure 29 for a judgment of acquittal on all counts, contending that the evidence was insufficient. The district court denied the motion in full, applying the Rule 29 standard that requires viewing the evidence in the light most favorable to the prosecution and drawing all reasonable inferences in the government's favor, and concluding that a rational jury could find guilt beyond a reasonable doubt. The court reasoned that circumstantial evidence, including testimony and trading records, adequately established the elements of conspiracy agreements to share material nonpublic information and the execution of trades based on that information.

criminal lawbusiness & regulatory

This case involved a trademark licensee, AB Sciex, seeking to enjoin arbitration proceedings initiated by its licensors, Life Technologies and Applied Biosystems, over the use of trademarks transferred in connection with the sale of a mass spectrometry business. The Purchase Agreement governing the sale contained an arbitration clause for disputes arising from it or related transaction documents, but the separate License Agreement granting AB Sciex the trademark rights did not. AB Sciex argued it was not bound by the arbitration clause as a non-signatory to the Purchase Agreement and that its trademark use was governed solely by the License Agreement. The court denied the motion to enjoin arbitration, holding that AB Sciex was estopped from avoiding arbitration because it knowingly exploited direct benefits of the Purchase Agreement through the licenses obtained via the License Agreement, which was an ancillary agreement required by the Purchase Agreement.

business & regulatoryprocedure

The case involved Canal + Image UK Ltd. suing lyricist and songwriter defendants for copyright infringement and breach of contract, alleging that their musical adaptation of the 1949 film Kind Hearts and Coronets exceeded the scope of a time-limited licensing agreement that had expired after Canal + declined to produce the work. The court had previously dismissed the copyright claim for lack of substantial similarity between the works and the contract claim as preempted by the Copyright Act. Defendants then moved for attorney’s fees under 17 U.S.C. § 505, but the court denied the motion, holding that Canal + had not litigated in bad faith and that the circumstances did not otherwise justify a fee award to the prevailing defendants.

procedureproperty

This case involves current and former employees of Thalassa Restaurant suing the restaurant operator, its owners and managers (the Makris family), and a related food importer for alleged violations of the Fair Labor Standards Act, New York Labor Law, and related state and city laws concerning wages, overtime, tips, and employment practices. The court ruled on cross-motions for partial summary judgment and a motion to dismiss certain plaintiffs, granting and denying each in part. It applied the economic realities test to determine employer status, finding that certain individual defendants exercised sufficient control over employees to qualify as employers while others did not, and resolved disputes over specific wage claims, willfulness for statute of limitations purposes, and liability for related entities based on the degree of operational involvement and ownership.

labor & employment

This case concerns an appeal from a bankruptcy court order holding that state-law apparent manufacturer claims against Pfizer (parent of debtor Quigley) were barred by the § 524(g) channeling injunction issued in Quigley's Chapter 11 asbestos bankruptcy. The district court reversed, ruling that the claims—based on Pfizer's use of its logo on Quigley asbestos products—fell outside the injunction's scope because they did not allege liability arising from Pfizer's ownership of, management of, insurance to, or corporate transactions with Quigley. The court further noted that related-to jurisdiction was doubtful under precedents like Pacor and Combustion Engineering but rested its decision on the injunction's limited statutory reach, allowing the claims to proceed in Pennsylvania state court.

business & regulatoryproceduretorts & liability

The case involved FR8 Singapore Pte. Ltd. seeking to compel Albacore Maritime Inc. and related Prime Defendants to arbitrate claims in London by treating the Prime Defendants as alter egos of Albacore under a contract with an English choice-of-law clause. The court had previously ruled that English law governed the alter-ego analysis and allowed defendants to renew their motion to dismiss after further briefing. On reconsideration, the court rejected FR8's arguments that federal common law should instead apply to the veil-piercing question. Applying English law, the court found the complaint insufficient because it did not allege that Albacore was incorporated to evade existing liabilities at the time of the transaction. The court therefore denied reconsideration and the request for a certificate of appealability, granted the motion to dismiss, and closed the cases.

procedurebusiness & regulatory

This case is a class action securities litigation brought by investors in the Yield Plus Fund against State Street Bank and Trust Company and related defendants, asserting claims under Sections 11, 12(a)(2), and 15 of the Securities Act of 1933. Plaintiffs alleged that the fund's offering documents contained materially misleading statements regarding the fund's diversification, liquidity objectives, investment in high-quality securities, and exposure to risky mortgage-related assets. After previously dismissing an earlier complaint but permitting amendment upon finding some claims viable, the court reviewed the Second Amended Complaint and granted defendants' motions to dismiss in full. The core reasoning was that the amended allegations still failed to adequately plead the existence of materially false or misleading statements or other required elements of the claims.

business & regulatoryprocedure

In Cohen v. Cohen, plaintiff Patricia Cohen sued her ex-husband Steven Cohen, his brother Donald, and former business partner Brett Lurie, alleging they defrauded her during their 1989 divorce by concealing a $5.5 million settlement Steven received in 1987 from a failed real estate investment made with marital assets. Patricia brought claims for civil RICO, common law fraud, breach of fiduciary duty, and unjust enrichment, asserting she was misled into agreeing that the investment was worthless. The court granted the defendants' motion to dismiss the claims against Steven and Donald. It held that the claims were time-barred under the applicable statutes of limitations because Patricia had inquiry notice of the alleged fraud by at least 1991, when she could have discovered the settlement through reasonable investigation during or after the divorce proceedings, but she did not file suit until many years later.

family lawproceduretorts & liability

The case involved Canal+ suing defendants Steven Lutvak and Robert L. Freedman for copyright infringement of its film Kind Hearts and Coronets and for breach of a licensing agreement that authorized development of a stage musical adaptation of the film. The court granted the defendants' motion to dismiss, finding that no reasonable jury could conclude the musical was substantially similar to the protectible aspects of the film and that the Copyright Act preempted the breach-of-contract claim. The reasoning focused on the absence of substantial similarity in protectible expression and the lack of any extra element in the contract claim that would distinguish it from rights equivalent to copyright infringement.

propertyprocedurebusiness & regulatory

This case is an in rem forfeiture action in which the United States seeks to seize real property, partnership interests, and accounts held by the Alavi Foundation, Assa Corp., and related entities, alleging they are proceeds of or involved in services provided to Iran in violation of the International Emergency Economic Powers Act (IEEPA) and related money laundering. The claimants moved to dismiss the complaint for failure to state a claim. The court denied the motion, finding that the government's allegations regarding the properties' ties to Iranian entities and sanctions violations were sufficient to proceed. The opinion details the historical background of the properties, including their origins under the Shah, post-revolution control by Iranian-linked foundations, and the formation of a partnership to address tax and ownership issues, supporting the plausibility of the forfeiture claims.

criminal lawfederal powerproperty

In Bader v. Wells Fargo Home Mortgage Inc., former Wells Fargo employees Neil Bader and Jason Auerbach sued their ex-employer for allegedly breaching employment agreements by withholding incentive compensation bonuses, including NOI Bonuses, Volume Overrides, and Volume Override True-Ups, along with related quasi-contract and New York Labor Law claims. Wells Fargo moved for judgment on the pleadings against Bader’s complaint and to dismiss portions of Auerbach’s complaint. The court granted in part and denied in part both motions. The core reasoning centered on the explicit terms of the 2009 Area Manager Incentive Compensation Plan, which conditioned certain annual bonuses on continued employment through December 31 and limited Volume Overrides to loans funded before an employee’s termination date, rendering claims for post-termination payments unenforceable under the plan language.

labor & employment

This case is an ERISA action in which Prudential Retirement Insurance and Annuity Co. (PRIAC), acting as fiduciary for nearly 200 retirement plans, sued State Street Bank and Trust Co. and its affiliate for alleged breaches of fiduciary duty in managing two collective bond funds in which the plans had invested. The opinion addresses cross-motions for summary judgment on State Street's affirmative defenses of failure to mitigate damages and superseding cause, as well as on State Street's counterclaims for contribution or indemnification, defamation, and violation of the Massachusetts Unfair Trade Practices Act, plus a motion to strike an expert report. The court denied State Street's summary-judgment motions on the damages defenses, granted PRIAC's motion as to the Chapter 93A counterclaim, denied it as to the contribution and defamation counterclaims, and denied the motion to strike. The rulings rest on the existence of genuine issues of material fact regarding most of the counterclaims, the legal conclusion that the unfair-trade-practices claim was not viable, and the determination that ERISA's general fiduciary provisions could support an implied duty relevant to the mitigation and superseding-cause issues.

labor & employmentbusiness & regulatoryprocedure

This case is a putative class action securities fraud suit brought by shareholders of The9 Ltd. against the company and several executives, alleging violations of Section 10(b) of the Securities Exchange Act and Rule 10b-5 based on statements made during the class period from November 2006 to July 2009. Plaintiffs claimed the defendants made misleading statements about the likelihood of renewing an exclusive license to operate the World of Warcraft game in China, the state of the company's relationship with Blizzard, and growth prospects, which allegedly caused stock price drops when the license was not renewed. The court granted the defendants' motion to dismiss the complaint in full, with leave to replead, because the plaintiffs failed to adequately plead scienter. The core reasoning was that the allegations did not support a strong inference of intent to deceive or recklessness, as stock sales by insiders were consistent with non-fraudulent motives like Rule 10b5-1 plans or increased holdings, and other facts did not show defendants knew their statements were false.

business & regulatory

The case involved plaintiff DDR Construction Services suing former business associates, including Siemens entities, Schlesinger, First Keystone, and others, for civil RICO violations as well as fraud, breach of fiduciary duty, and related state-law claims arising from construction industry joint ventures, bidding arrangements, and profit-sharing disputes in New York. The court granted the defendants' motions to dismiss, granted in part and denied in part DDR's cross-motions to strike and for sanctions, and denied DDR's requests for leave to amend or seek further sanctions. The core reasoning was that DDR lacked RICO standing due to insufficient direct injury and proximate cause, failed to plead fraud with the particularity required by Rule 9(b), and that remaining claims were either preempted by the Queens Action or otherwise deficient as a matter of law.

criminal lawbusiness & regulatoryprocedure

In Altman v. United States Securities & Exchange Commission, attorney Steven Altman sued the SEC and its officials seeking to halt administrative proceedings against him and to vacate the agency's lifetime ban on his practicing before the SEC. The SEC had imposed the ban after finding that Altman offered to have his client obstruct justice and commit perjury in exchange for financial benefits during an investigation of Harrison Securities. The district court dismissed the case, holding that it lacked jurisdiction under Section 25 of the Securities Exchange Act of 1934. The court reasoned that the statute establishes an exclusive review scheme channeling challenges through the SEC and then directly to the courts of appeals, consistent with precedents such as Thunder Basin Coal Co. v. Reich that preclude district court intervention in such administrative enforcement matters.

business & regulatoryprocedurefederal power

In Stephenson v. PricewaterhouseCoopers, LLP, the plaintiff trustee alleged that auditor PWC committed fraud by failing to detect red flags in its audits of Greenwich Sentry, a feeder fund that invested in Bernard Madoff's Ponzi scheme, causing the plaintiff to lose his entire investment. The court granted PWC's motion to dismiss the common law fraud claim. The core reasoning was that the complaint failed to adequately plead scienter, as the alleged red flags, PWC's shared access to firm-wide databases, and its audit plan did not give rise to a strong inference of recklessness or intent under the Tellabs standard applied to such claims.

business & regulatory

This case is an SEC enforcement action against former StarMedia executives for alleged accounting fraud involving improper recognition of revenue from reciprocal base book and incremental revenue transactions with related parties. The court previously denied motions to dismiss most claims and now considers defendant Morales's motion for judgment on the pleadings, which argues that the amended complaint undermines the prior ruling. The court denied the motion, finding that the amended complaint still sufficiently alleges Morales acted unreasonably by failing to alert auditors to the non-sales nature of the receivables and by not questioning the accounting treatment despite internal reports showing no offsetting cash sales.

business & regulatory

This case is a securities fraud class action brought by U.S. and foreign shareholders of Vivendi Universal, S.A., alleging that the company and its former CEO and CFO made material misstatements and omissions that inflated the price of Vivendi shares and ADRs during the class period from 2000 to 2002, in violation of Section 10(b) and Section 20(a) of the Securities Exchange Act. After a jury trial, the jury found that Vivendi violated Section 10(b) but that the individual executives did not commit primary or secondary violations. The court rules on Vivendi's renewed motions for judgment as a matter of law under Rule 50(b) and for a new trial under Rule 59, as well as plaintiffs' motion for entry of final judgment; it also addresses the impact of the Supreme Court's Morrison decision, which limits the extraterritorial reach of U.S. securities laws, and accordingly modifies the certified class to exclude certain foreign-cubed claims while upholding the jury's findings on liability, scienter, loss causation, and damages for the remaining claims.

business & regulatoryprocedure

Plaintiff Suzanne Langford, an African American woman, sued her employer Starrett City and union Local 30 for race and sex discrimination, hostile work environment, failure to train, and constructive discharge under Title VII, 42 U.S.C. § 1981, the NYSHRL, and NYC Human Rights Law, based on incidents during her apprenticeship program such as lack of training, racially offensive comments, unsafe assignments, and cleaning tasks in a sexually hostile locker room. The defendants moved to dismiss under Rules 12(b)(3) and 12(b)(6), Title VII's timing and exhaustion rules, and LMRA preemption, arguing that claims required interpretation of the collective bargaining agreement or were otherwise deficient. The court granted the motions in part and denied them in part, holding that certain claims were not preempted because they turned on discriminatory motivation rather than CBA construction, that some allegations supported inferences of discrimination, and that other claims failed exhaustion or pleading requirements.

labor & employmentcivil rightsprocedure

This case involves a third-party motion to quash a subpoena duces tecum issued by defendant Raj Rajaratnam under Federal Rule of Criminal Procedure 17(c) in a federal insider trading prosecution. The court denied the motion, finding that requests for communications, payments, compensation records, and tax returns were relevant to allegations that the third party acted as an intermediate tipper or received personal benefits from inside sources. The court reasoned that the requests met the Nixon standards of relevancy, admissibility, and specificity rather than amounting to a fishing expedition, and that state-law privileges protecting tax records do not apply in this federal criminal context under Rule 501.

criminal lawprocedure