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Justia Weekly Opinion Summaries

Drugs & Biotech
January 29, 2021

Table of Contents

Securities & Exchange Commission v. Johnston

Drugs & Biotech, Government & Administrative Law, Securities Law

US Court of Appeals for the First Circuit

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Drugs & Biotech Opinions

Securities & Exchange Commission v. Johnston

Court: US Court of Appeals for the First Circuit

Docket: 19-2264

Opinion Date: January 22, 2021

Judge: William Joseph Kayatta, Jr.

Areas of Law: Drugs & Biotech, Government & Administrative Law, Securities Law

The First Circuit affirmed the district court's denial of Defendant's motion for judgment as a matter of law and for a new trial in this civil enforcement action brought by the Securities and Exchange Commission, holding that the evidence was sufficient to support the verdict. At issue was whether Defendant, the CFO of AVEO Pharmaceuticals, knowingly misled investors by the manner in which he responded to investor inquiries about the substance of AVEO's discussions with the Food and Drug Administration (FDA) about the results of AVEO's clinical trial for tivozanib, a kidney cancer drug candidate. A jury found against Defendant. On appeal, Defendant argued (1) he was entitled to judgment as a matter of law because he had no duty to disclose the substance of the FDA discussions and because the evidence of scienter was insufficient, and (2) he was entitled to a new trial because the district court improperly instructed the jury. The Supreme Judicial Court affirmed, holding (1) the evidence of fraud and scienter was sufficient to support the verdict; and (2) the challenged instructions were not given in error.

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