Class Action Law

Molycorp., Inc. (NYSE: MCP)

Haeggquist & Eck, LLP, a shareholder, and consumer rights litigation firm, has commenced an investigation on behalf of investors who purchased Molycorp Inc. (NYSE: MCP) Senior Convertible 6.00% Notes due 9/1/2017 (the “Notes”).  Specifically, Zeldes Haeggquist & Eck, LLP is investigating whether Molycorp and its top executives and officers made false and misleading statements in the prospectus and registration statement that the Company provided when issuing the Notes to the public on August 17, 2012.

On August 17, 2012, Molycorp sold approximately $360 million worth of Notes to the investing public via a public offering (the “Offering”). Zeldes Haeggquist & Eck, LLP is investigating whether, at the time of the Offering, Molycorp executives failed to disclose that Molycorp’s reported inventory was materially understated and that Molycorp’s lacked adequate internal and financial controls.

On August 8, 2013, Molycorp reported its second-quarter 2013 results. Among other things, Molycorp reported that is quarterly Total Revenue declined from $146.37 million in the first quarter 2013 to $136.86 million in the second quarter 2013 and that its Net Loss increased from $47.22 million in the first quarter 2013 to $71.17 million in the second quarter 2013. The Molycorp Notes are now trading at approximately $59, down from the offering price of $100.

What You Can Do

If you purchased Molycorp Notes and have suffered a loss, you may have legal claims against Molycorp’s Officers and Directors.  If you wish to discuss this investigation or have questions about this notice or your legal rights, please contact the attorneys at Haeggquist & Eck, LLP. There is no cost to you.

To schedule your free initial consultation, contact us online or call (619) 342-8000 today!

Haeggquist & Eck, LLP Announces Investigation Of CytRx Corporation

Haeggquist & Eck, LLP, a shareholder, and consumer rights litigation firm, has commenced an investigation into possible violations of the federal securities laws and other violations at CytRx Corporation (“CytRx” or the “Company”).

CytRx (NASDAQ: CYTR) is a pharmaceutical research and development company headquartered in Los Angeles, California. The investigation focuses on allegations that CytRx hired a promoter, The DreamTeam Group, to publish favorable articles about CytRx stock without disclosing to investors that the Company had paid The DreamTeam Group to promote the stock.  An article published on March 13, 2014, on SeekingAlpha.com alleges that the articles were written under multiple aliases and were coordinated with the release of news from the Company in order to amplify the effect of the news on the Company’s stock price.

What You Can Do

If you purchased CytRx shares prior to this disclosure on March 13, 2014, you may have legal claims under the securities laws.  If you wish to discuss this investigation or have questions about this notice or your legal rights, please contact attorney Amber L. Eck at (619) 342-8000. There is no cost to you.

To schedule your free initial consultation, contact us online or call (619) 342-8000 today!

Plaintiffs Win Ninth Circuit Appeal Of Anti-SLAPP Motion Against Trump University

San Diego (November 27, 2013) – On April 17, 2013, the 9th Circuit issued an Order reversing the district court’s denial of an Anti-SLAPP motion to strike a defamation counterclaim filed by plaintiff Tarla Makaeff against Trump University, and today the 9th Circuit issued an Order denying Trump University’s motion for en banc review.

In April 2010, plaintiffs’ counsel Zeldes Haeggquist & Eck, LLP and Robbins Geller Rudman & Dowd filed a consumer class action against Trump University in federal court, alleging that Trump University made false and misleading statements in its advertising and real estate seminars in violation of state and federal laws.  In response, Trump University attempted to intimidate plaintiff Tarla Makaeff into dropping her lawsuit by filing a defamation counterclaim against her. In the defamation action, Trump University claimed that Ms. Makaeff defamed Trump University by lodging complaints with the Better Business Bureau and other government agencies and on an Internet consumer website about the marketing and sale of its real estate seminars.

In response, plaintiffs filed an Anti-SLAPP motion, asking the court to dismiss the defamation claim because the lawsuit was brought in retaliation for Ms. Makaeff exercising her right to free speech.  In August 2010, the district court denied Plaintiffs’ Anti-SLAPP motion, and plaintiffs appealed.

In the Ninth Circuit’s April 17, 2013 ruling, the Court noted that statements by consumers, such as Ms. Makaeff, relate to an “issue of public interest” and are protected activity under the Anti-SLAPP statute because they are “a warning not to use [the company’s] services.”  The Court also found that Trump University was a limited purpose public figure because a “public controversy existed over Trump University’s educational and business practices when Makaeff made her statements about them.”  The court held that “large scale, aggressive advertising can inject a person or entity into a public controversy that arises from the subject of that advertising,” and that “Trump University conducted an aggressive advertising campaign in which it made controversial claims about its products and services,” and that there was a “direct relationship between Trump University’s promotional messages and Makaeff’s allegedly defamatory statements.”  The Ninth Circuit stated that: “[H]aving traded heavily on the name and fame of its founder and chairman, Trump University was in no position to complain if the public’s interest in Trump fueled the flames of the legitimate controversy that its business practices engendered.”

In regard to Trump University’s contention that Makaeff previously said positive things about Trump University, the court eloquently stated: “As the recent Ponzi-scheme scandals involving onetime financial luminaries like Bernard Madoff and Allen Stanford demonstrate, victims of con artists often sing the praises of their victimizers until the moment they realize they have been fleeced.  Makaeff’s initial enthusiasm for Trump University’s program is not probative of whether she acted with actual malice.”

On November 27, 2013, the Ninth Circuit Court of Appeals denied Trump University’s petition for rehearing in a lengthy order drafted by Judge Wardlaw and Callahan (joined by Judges Fletcher and Gould); there is also a lengthy dissent by Judge Watford (joined by Judges Kozinski, Paez and Bea). In its opinion, the Court noted that: “Every circuit that has considered the issue has agreed with our conclusion in Newsham that anti-SLAPP statutes like California’s confer substantive rights under Erie.”  The Court concluded that Newsham and Batzel were correctly decided, that the purpose of an Anti-SLAPP motion is to “determine whether the defendant is being forced to defend against a meritless claim,” and that if Anti-SLAPP motions were not permitted in federal court, it would “put the federal courts at risk of being swept away in a rising tide of frivolous state [defamation] actions that would be filed in our circuit’s federal courts.”

The Ninth Circuit stated that: “Trump University’s counterclaim was obviously designed to overwhelm Makaeff by making it more burdensome and expensive for her to pursue her deceptive business practices claims against Trump University. Makaeff’s motion to strike concerned the frivolity of Trump University’s allegation that her speech about its deceptive business practices was defamatory; its very purpose was to determine whether Trump University’s counterclaim was designed to chill Makaeff’s valid exercise of her First Amendment rights.”

To schedule your free initial consultation, contact us online or call (619) 342-8000 today!

NQ Mobile, Inc.

Haeggquist & Eck, LLP has commenced an investigation into claims on behalf of purchasers of  NQ Mobile Inc. (NYSE: NQ) (“NQ or the “Company”) securities concerning potential violations of the Securities Act of 1933 and the Securities Exchange Act of 1934 by Company offices and directors during the period between May 5, 2011, through May 2, 2013 (the “Class Period.”)

Zeldes Haeggquist & Eck’s investigation concerns whether NQ issued materially false and misleading statements regarding the Company’s business and financial prospects during the Class Period and in connection with the Company’s May 5, 2011, initial public offering (“IPO”).

Founded in 2005 and headquartered in Beijing, PRC, NQ provides various mobile Internet services.  The company was formerly known as NetQin Mobile Inc. and changed its name to NQ Mobile Inc. in April 2012.

On May 5, 2011, NQ conducted its IPO of American Depositary Shares (NYSE: NQ).   The shares were priced at $11.50 per share.  Following the IPO, and during the Class Period, NQ share prices increased significantly, climbing to nearly $25 per share in October 2013.

Then, on October 24, 2013, equity research firm Muddy Waters LLC initiated coverage on NQ with a “Strong Sell” rating and a projected target price of less than $1.  Among other things, Muddy Waters’ research report states: (i) at least 72% of NQ’s reported $32.2 million in 2012 China security software revenue is fraudulent, NQ’s real security revenue was $2.5 million to $7.7 million; (ii) NQ’s largest customer is actually an empty shell company controlled by NQ; (iii) NQ’s real market share in China is only about 1.4%, versus the approximately 55% it reports; (iv) NQ’s international revenues are wildly overstated; and (v) the vast majority of the $127.9 million cash and investments NQ reported having as of December 31, 2012, is not actually in the Company’s accounts.

Upon the release of this information, on October 24, 2013, NQ shares declined 47% to $12.09 per share from $22.88 per share, on unusually heavy volume of 29.3 million shares traded.

To schedule your free initial consultation, contact us online or call (619) 342-8000 today!

Class Action Certified Against Sony For Defective Laptop Touchpads

On September 25, 2013, the United States District Court for the Southern District of California issued an order granting class certification to California and New Jersey residents who allege Sony Electronics, Inc. knowingly marketed and sold laptops containing defective touchpad components.  A redacted copy of the order can be found here.  “This is a great decision for consumers whose complaints about their trackpads on their Sony VAIO laptops malfunctioning have long fallen on (Sony’s) deaf ears,” said Helen Zeldes, of Zeldes, Haeggquist & Eck., class counsel for the lead plaintiffs in the class action lawsuit against Sony.   “We look forward to the next chapter in this litigation.”

The Court found “that both named plaintiffs and their counsel will provide adequate representation on behalf of the class.”  In addition, referring to Sony’s attempt to defeat certification, the Court found, in part, that “three cases Sony relies on” are “materially different than Sony’s representation” and its assertion is “patently incorrect.”  Simply put, Sony “has failed to explain how this case will be unmanageable beyond cursory assertions.  In contrast, Plaintiffs argue two sub-classes sufficiently manage the different States’ laws.”  “Each sub-class is represented by an appropriate named plaintiff and the respective state law will be applied to that sub-class.  Under these circumstances, the Court finds the case easily manageable as the state law is clear cut.”

Ultimately, the central question regarding the laptops at issue is whether there is a design defect in the touchpad.  “Resolving this issue, one way or another, for hundreds of thousands of VAIO computers sold since 2006, adds great economy of scale favoring class action treatment.”  “The cost of repairing or returning a defective laptop is too small to incentivize class members to litigate claims individually.”

To schedule your free initial consultation, contact us online or call (619) 342-8000 today!

Shareholders Will Benefit From New CEO Pay-Disclosure Rule

It’s no secret that executives of companies earn more than the average worker. However, the pay disparity between CEOs and workers has skyrocketed over the past 30 years. In 2012, CEOs in the S&P 500 index earned 354 times more pay than other workers, as compared to 30 years ago, when CEOs earned about 42 times more than the average worker.

Thanks to a recent vote by the U.S. Securities and Exchange Commission (“SEC”), CEO pay is likely to become more transparent to shareholders. On Wednesday, the SEC voted on a proposed rule that will require public companies to disclose how much their CEOs earn compared to their other workers. Public companies will be required to include a ratio of CEO-to-worker annual compensation in their regulatory filings.

The rule will deliver important additional information to shareholders. According to Commissioner Luis Aguilar, “As owners of public companies, shareholders have the right to know whether CEO pay multiples reflect CEO performance. Shareholders have the right to know how their company’s internal pay comparisons may impact employee morale, productivity, hiring, labor relations, succession planning, growth and incentives for risk-taking.”

The next step for the rule is a 60-day public comment period.

To schedule your free initial consultation, contact us online or call (619) 342-8000 today!

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