On May 29, the Texas Supreme Court issued its decision in Sneed v. Webre, in which it tackled two issued regarding shareholder derivative suits involving closely held corporations: First, whether these suits may be barred by the business judgment rule, and, second, whether Texas recognizes the "double-derivative" standing of a parent company's shareholder tof sue on behalf of a subsidiary. In an important win for shareholders' rights after Ritchie v. Rupe, the Supreme Court answered both questions in favor of the shareholder.
In an ongoing lawsuit by the Securities and Exchange Commission (SEC) against a Texas man it has accused of defrauding investors in a Ponzi scheme involving the popular "virtual currency" Bitcoin, Federal Magistrate Judge Amos Mazzant of the Eastern District of Texas re-affirmed in August his earlier denial of the defendants' motion to dismiss. In his ruling, Judgef Mazzant held that Bitcoin is "money" and that contracts involving the investment of Bitcoin rather than traditional currency are nonetheless subject to federal securities law. In an ironic twist, the ruling lends credibility to Bitcoin as a currency while simultaneously allowing the government to proceed in a case highlighting Bitcoin's risks and to potentially subject it to closer regulation-certainly an uncomfortable situation for a currency whose entire point is to serve as an alternative to government-sponsored legal tender.
Last month, Washington Attorney General Robert Ferguson filed suit on behalf of the State of Washington against a man and a business who raised $25,146 backers on the crowdfunding website Kickstarter. The lawsuit alleges that Ed Nash and his company, Altius Management, failed to deliver promised "rewards" to his 810 backers. This is the first known consumer protection suit brought by a state government involving crowdfunding, and highlights some of the risks for all participants in this new form of investment.
Texas Tech head football coach, Tommy Tuberville, his partner, and the investment company the two own, TS Partners, have been named defendants in a financial fraud lawsuit. The lawsuit was filed in a federal court in Montgomery, Alabama, and alleges more than $1.7 million in damages.