acceleration clause
An acceleration clause is a term in a contract (typically a loan agreement) that requires a party to make all payments due under the contract if certain conditions occur. An acceleration clause is typic
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Finance
Dodd-Frank: Title X - Bureau of Consumer Financial Protection
Introduction
Title X of the Dodd-Frank Act (aka: Consumer Financial Protection Act of 2010), created the Consumer Financial Protection Bureau (CFPB or Bureau) as an independent agency within the Board of Governors of the Federal Reserve System (Federal Reserve). The CFPB regulates the offer
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Dura Pharmaceuticals, Inc. v. Broudo
Dura Pharmaceuticals is a publicly traded company that developed and marketed prescription pharmaceuticals for the treatment of allergies and asthma. Investor plaintiffs brought a class action securities fraud action against Dura under §10(b) of the Securities Exchange Act, alleging that Dura knowingly misrepresented the success of the clinical trials for one of their asthma products, transferred the losses incurred from product development to subsidiary corporations in order to perpetuate the perception of high earnings for the parent company, and made repeated public statements regarding the success of its drug sales when sales were actually declining. The plaintiffs also claimed that Dura executives sold approximately $400 million of their personally-held Dura stock, actions which raise suspicions of insider trading.
The trial court dismissed the plaintiffs' complaint, ruling that the plaintiffs had failed to meet the pleading requirements of §10(b) and the Private Securities Litigation Reform Act. On appeal, the Ninth Circuit reversed, ruling that the lower court misinterpreted the loss causation element of §10(b) and that the lower court should have considered the plaintiffs' allegations collectively in order to determine whether the pleading requirements had been met. The Supreme Court granted certiorari in order to provide a clear standard on these two pleading requirement issues.
The Supreme Court will now resolve the question of whether or not plaintiff investors met the pleading requirements to bring a cause of action for federal securities fraud under §10(b) of the Securities Exchange Act against Dura Pharmaceuticals.
Questions as Framed for the Court by the Parties
Whether a securities fraud plaintiff invoking the fraud-on-the-market theory must demonstrate loss causation by pleading and proving a causal connection between the alleged fraud and the investment's subsequent decline in price.
Defendant Dura Pharmaceuticals ("Dura") is a publicly traded company that develops and markets prescription pharmaceuticals for the treatment of allergies and asthma. The plaintiffs are investors who purchased Dura stock between April 15, 1997 and February 24, 1998. Broudo v. Dura Pharms., Inc., 339 F.3d 933, 935 (9th Cir., 2003).
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negotiable instrument
A negotiable instrument, sometimes called an instrument, is any financial document that directs payment to its holder or a named party. More specifically, a negotiable instrument must be written, signed by the maker, include an unconditional promise or order to pay a sum of money to the holder or specific party, and be payable any time or on a specif
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Securities Act of 1933
The Securities Act of 1933 was Congress's opening shot in the war on securities fraud. Congress primarily targeted the issuers of securities. Companies which issue securities (called issuers) seek to raise money to fund new projects or investments or to expand their operations. These companies must attract potential investors.
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