First-ever spoofing conviction is affirmed. The government contended that defendant commissioned and utilized a computer program designed to place small and large orders simultaneously on opposite sides of the commodities market in order to create illusory supply and demand and to induce artificial market movement. Defendant was charged with violating the anti-spoofing provision of the CEA and commodities fraud. The Seventh Circuit affirmed defendant’s spoofing conviction, holding that the anti-spoofing provision provides clear notice, does not allow for arbitrary enforcement, and is not unconstitutionally vague. (8/7/2017) United States v. Coscia.
Defendant cannot transform non-forward-looking statements into forward-looking statements protected by the PSLRA. Plaintiffs contended that defendant used false/misleading statements to support public guidance to investors about its projected growth/revenue. A district court found that defendant’s non-forward-looking statements were puffery and forward-looking statements were protected by the PSLRA’s safe harbor provision. The Ninth Circuit reversed and remanded, determining that a defendant cannot transform non-forward-looking statements into protected forward-looking statements by combining non-forward-looking statements about past or current facts with forward-looking statements about projected revenues/earnings. (7/28/2017) In re Quality Systems Inc. Securities Litigation.