Louisiana Municipal Police Employees’ Retirement System v. Wynn

In this derivative suit, shareholders failed to allege facts sufficient to show futility of demanding that the board of directors remedy corporation’s alleged bribery of foreign officials, since complaint did not sufficiently aver that insiders controlled a majority of the board or that board members likely faced personal liability for the corporation’s acts.  Shareholders failed…

ESG Capital Partners LP v. Stratos

Buyer of bogus securities states a federal securities fraud claim against the promoter’s lawyer who represented that the promoter was who he purported to be and who misdirected buyer’s downpayment to promoter personally rather than seller company.  Buyers duped by a con artist into paying $11 million for supposed pre-IPO Facebook shares stated a 10b-5…

Innes v. Diablo Controls, Inc.

Corp. Code 1601 is interpreted to require a California corporation to allow a shareholder to inspect the corporation’s records, but only at the location where those records are ordinarily maintained.  Following Jara v. Suprema Meats, Inc. (2004) 121 Cal.App.4th 1238, this decision holds that Corp. Code 1601 requires a California corporation to allow a shareholder…

Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Manning

Under Federal Securities Exchange Act section 27 (15 USC 78aa(a)), federal courts have exclusive jurisdiction if either (a) plaintiff’s claim is created by the Exchange Act, or rules or regulations adopted under it, or (b) if the suit necessarily raises a substantial, disputed federal securities law issue.  Section 27 of the Federal Securities Exchange Act…