Nicole Lavallee

Between January 22 and January 31, 2001, Lawrence J. Ellison sold about 29 million shares of Oracle Corporation, roughly 2 percent of what he owned, for close to $900 million. He had acquired the shares at 23 cents each and sold them at $30 to $32, an average of $30.76; it was his first sale of Oracle stock in five years, and he still held more than 1.2 billion shares. On March 1, 2001, Oracle announced that its earnings for the quarter had missed projections and that its sales forecasts had been significantly off, and after the announcement the stock closed at $16.88. Derivative suits, brought by shareholders on Oracle’s own behalf, were filed beginning March 12, 2001; the California cases were coordinated in San Mateo County Superior Court as the Oracle Cases, JCCP No. 4180, and a consolidated amended complaint was filed there on January 28, 2002. Nicole Lavallee, then a partner in the San Francisco office of Berman DeValerio, the firm now called Berman Tabacco, handled the day-to-day prosecution of the derivative insider-trading action against Ellison, with Joseph J. Tabacco Jr. overseeing it and the firm serving as co-lead counsel. On November 22, 2005, Judge John G. Schwartz approved a settlement under which Ellison would personally make $100 million in charitable donations in Oracle’s name over five years, and Oracle tightened its rules on trading by insiders.

Lavallee is now the managing partner of Berman Tabacco’s San Francisco office, a member of its Executive Committee and co-chair of its Securities Practice Group. She has prosecuted securities cases since the Private Securities Litigation Reform Act took effect in 1995, and the cases she has prosecuted have recovered more than a billion dollars for investors. She is the principal contact for many of the firm’s investor clients and a member of its New Case Investigations Team, and her practice runs through securities class actions, opt-outs, derivative litigation, lead-plaintiff counseling, new-case investigation, dispositive motions, trial preparation, settlement approval and claims administration, from the first screening of a potential case through judgment and distribution.

A Remedy Built Around a 24.5 Percent Shareholder

The consolidated California complaint alleged that Oracle’s directors had breached their duties through misstatements about the company’s revenue, growth and certain of its applications products, and that certain officers and directors had sold stock while holding material non-public information. In the separate federal securities class action over the same period, the Ninth Circuit, reinstating the investors’ complaint in September 2004, wrote that “The timing of the stock sale is also suspicious.” Parallel derivative claims had been filed in the Delaware Court of Chancery, where Oracle’s board appointed a special litigation committee of two Stanford professors who had joined the board, Hector Garcia-Molina and Joseph Grundfest, and the committee concluded that the company should not sue. On June 17, 2003, Vice Chancellor Leo E. Strine Jr. refused to let that conclusion end the case: Ellison had been publicly considering large donations to Stanford when the two professors joined the board, his medical research foundation had given the university nearly $10 million, and those ties, the court held, left a material question about the committee’s independence, so the claim against Ellison could proceed. The decision is reported at 824 A.2d 917.

In San Mateo the case narrowed over the following two years to Ellison alone, and on June 9, 2005 he moved for summary judgment. Lavallee handled the summary-judgment briefing, and the presiding judge singled out her brief as excellent. The motion was withdrawn by stipulation on August 15, 2005, and in September Tabacco announced that Ellison had tentatively agreed to settle: he would fund $100 million in charitable contributions over five years in Oracle’s name, subject to approval by Oracle’s board.

The first version of the agreement, presented to the court in September 2005, would have had Oracle, rather than Ellison, pay for the litigation that had been brought against him. At a hearing on September 26, Judge Schwartz declined to approve it: the suit concerned Ellison’s personal stock sales, and he would not have the company and its shareholders pay for it. He set a November hearing and told the parties to revise the agreement. They did, on November 9, 2005, with Daniel Weinstein, a retired judge, as mediator. Under the renegotiated settlement Ellison, who denied any wrongdoing, bore those costs himself, with no contribution from directors’ and officers’ liability insurance, in addition to the $100 million in donations, and he acknowledged that Oracle’s insider trading policies had been changed as a result of the lawsuit: insiders would trade through program trading plans, pre-clearance would be stricter and trading windows narrower. Oracle’s independent directors approved the settlement as in the interest of the company and its shareholders. Judge Schwartz approved it on November 22, 2005 and entered a judgment of dismissal the same day; a shareholder’s appeal, filed January 17, 2006, was dismissed on February 16, 2006, and the judgment became final.

Ellison owned about 24.5 percent of Oracle, so a payment from him to the company would have returned nearly a quarter of it to him; the charitable structure put the money outside the company, in Oracle’s name, instead. Tabacco said afterward that the firm had taken “what was already an excellent settlement and made it even better” and had been able to “address the court’s concerns to the company’s benefit.” Lavallee put the point in terms of the statute: “The primary purpose of the California insider trading law was not to reimburse the company, but to deter insider trading. We believe this settlement does just that.”

A Defunct Issuer and Six Underwriters

IndyMac Bank was closed by the Federal Deposit Insurance Corporation on July 11, 2008. Its securitization arm, IndyMac MBS, Inc., had issued mortgage pass-through certificates in about 106 offerings under three registration statements, dated August 15, 2005, February 24, 2006 and February 14, 2007, and the offering documents told buyers that the loans behind each trust had been originated under stated underwriting guidelines, with exceptions possible, and that the appraisals followed the Uniform Standards of Professional Appraisal Practice. The Wyoming State Treasurer, which manages more than $10 billion in non-pension assets, and the Wyoming Retirement System, which administers eight retirement programs, had bought certificates in fifteen of those offerings. Lavallee served as a lead partner for both funds in In re IndyMac Mortgage-Backed Securities Litigation in the Southern District of New York, with the Wyoming Attorney General’s office overseeing the litigation for the state. The complaint, filed May 14, 2009, alleged that the offering materials for certificates issued in 2006 and 2007 misrepresented the underwriting practices used for the supporting loans: that IndyMac had abandoned its guidelines, including its standards for exceptions, “in an effort to produce as many loans as possible,” lending without regard to borrowers’ ability to repay and with little review of income, assets or employment. Confidential witnesses described pressure for volume and approvals they believed violated the guidelines; delinquency and foreclosure rates on the underlying mortgages rose sharply after issuance, and the rating agencies downgraded the certificates.

The claims were brought under Sections 11, 12(a)(2) and 15 of the Securities Act of 1933 and focused on the registration statements and prospectus supplements. On June 21, 2010 Judge Lewis A. Kaplan ruled on the defendants’ motions to dismiss. He held that the named plaintiffs had standing for the offerings in which they had bought, and he sustained the underwriting-standards claims for those certificates, finding that the allegations tied the misstatements to the loans themselves and that the materiality of the misstatements could not be decided against the investors as a matter of law; the risk disclosures in the documents, he wrote, “do not adequately warn of the risk the standards will be ignored.” With the issuer defunct and the underwriters asserting due-diligence defenses, the case had to be built offering by offering and certificate by certificate: which loans stood behind each trust, which underwriter had sold it, which purchasers had lost what. The litigation came to cover more than 50 offerings, 465 certificates and more than 74,000 loans. Discovery ran to four discovery motions, more than a dozen document requests, fifteen depositions and the review of more than eleven million documents, and it accounted for 32,658 of the 55,372 hours the plaintiffs’ lawyers recorded over the life of the case.

The question whether the filing of a class action holds open the Securities Act’s three-year time limit for investors who join the case later had arisen in this litigation; the Second Circuit had answered it in 2013, and the Supreme Court granted review on March 10, 2014 in Public Employees’ Retirement System of Mississippi v. IndyMac MBS, Inc., No. 13-640, and set argument for October 6, 2014. The Los Angeles County Employees Retirement Association, a class representative in the IndyMac case, was represented in the Supreme Court by Berman DeValerio. Before the argument could be held, the case settled below. On September 11, 2014 the lead plaintiffs filed a stipulation of settlement with the six remaining underwriter defendants, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities, Inc., J.P. Morgan Securities, Inc., in its own right and as successor to Bear Stearns & Co., RBS Securities, Inc., Morgan Stanley & Co., Inc. and UBS Securities LLC, for $340 million. The Supreme Court ordered letter briefs on September 23 on the effect of the proposed settlement, received them on September 24 and 25, and on September 29, 2014, a week before the scheduled argument, dismissed the writ as improvidently granted.

The underwriters’ $340 million joined a $6 million partial settlement with former IndyMac officers and directors that the court had approved in December 2012, for $346 million in all. Judge Kaplan granted final approval and certified the settlement class on February 23, 2015, finding the settlement “in all respects, fair, reasonable and adequate.” In a later opinion he wrote that he was “satisfied that class counsel litigated this case effectively,” and he described the result as “the largest reported settlement against underwriters in the absence of a solvent issuer.” Lavallee’s daily responsibilities ran the full length of the case, from client communication through discovery, negotiation and the approval proceedings to the administration of the settlement until the class fund was paid out. “We are extremely satisfied with this settlement,” she said when it was filed, “which offers a meaningful remedy for investors.”

Receivables From Four Shell Companies

Aegean Marine Petroleum Network, a marine-fuel supplier founded in 1995 by Dimitris Melissanidis, went public in December 2006 and traded on the New York Stock Exchange. In May 2018 its entire audit committee stepped down and a new, independent committee was formed. In June 2018 the company disclosed that about $200 million of accounts receivable on its books at December 31, 2017 would have to be written off because the underlying transactions “may have been, in full or in part, without economic substance and improperly accounted for.” On November 2, 2018 the reconstituted committee reported what its investigation had found: the roughly $200 million in receivables had been booked from transactions with four shell companies tied to former employees or affiliates of the company; “up to $300 million of Company cash and other assets were misappropriated through fraudulent activities,” including through a 2010 contract with OilTank Engineering & Consulting Ltd.; bank statements, audit confirmations and invoices had been falsified; prepayments had been made for oil that was never delivered; revenues and earnings for 2015, 2016 and 2017 were overstated and would have to be restated; and a federal grand jury had served a subpoena. Four days later, on November 6, 2018, Aegean filed for Chapter 11 in the Southern District of New York.

Lavallee served as lead partner in the securities class action that followed, In re Aegean Marine Petroleum Network, Inc. Securities Litigation, before Judge Naomi Reice Buchwald, for Utah Retirement Systems as lead plaintiff and a class of investors who had acquired Aegean securities from February 27, 2014 through November 5, 2018; the consolidated complaint was filed on February 1, 2019. The defendants included Melissanidis, Spyros Gianniotis, the former chief financial officer, and the company’s Greek auditors: Deloitte Certified Public Accountants S.A., which had audited Aegean from 2006 through 2015 and issued clean opinions for 2013 through 2015, and PricewaterhouseCoopers Auditing Company S.A., which took over for 2016 and issued its only opinion on May 16, 2017. The bankruptcy complicated the case from the start. The Chapter 11 plan Aegean brought for confirmation in early 2019 asked for releases that would have barred claims owned by creditors and stockholders, securities claims among them, against Mercuria Energy Group, the acquirer, and against three men who had joined the audit committee in May 2018, with no exception for fraud or willful misconduct. Utah Retirement Systems appeared in the bankruptcy case, and on April 8, 2019 Judge Michael E. Wiles refused the releases, finding no evidence that they were necessary to the reorganization and no identified claim they would resolve: “They are not a participation trophy, and they are not a gold star for doing a good job.”

On March 29, 2021 Judge Buchwald denied the auditors’ joint motion to dismiss and Gianniotis’s motion, and denied Melissanidis’s motion in part. The investors had alleged that the auditors either knew of the fraud or recklessly ignored its warning signs. The Public Company Accounting Oversight Board later described those signs in the 2016 audit: PwC Greece’s engagement team knew that an Aegean executive with significant control over the company had a prior criminal conviction for fuel smuggling that involved “virtual invoicing,” had assessed a significant risk of material misstatement due to fraud, and had trouble getting street addresses for the four customers whose transactions made up 13 percent of Aegean’s reported revenue. When the addresses came, an affiliated PwC firm visited three of them. One did not exist; two were residential apartment buildings with no businesses in them. The engagement partner, Nicos George Komodromos, had the remaining visit cancelled, the attempted visits were left out of the workpapers, and the firm issued an unqualified opinion. On November 14, 2023 the Board censured PwC Greece, fined it $3 million and ordered two years of third-party reviews of its issuer audits, and censured Komodromos, fined him $80,000 and barred him for two years from associating with a registered firm; both consented without admitting or denying the findings. The class had reached its own terms with the auditors earlier: an agreement in principle with PwC Greece on August 26, 2021 and with Deloitte Greece on December 22, 2021, $14.9 million from each, $29.8 million in all, with every class member eligible to share in the Deloitte fund and those who bought after May 16, 2017 in the PwC fund. Judge Buchwald granted preliminary approval in June 2022 and final approval on September 14, 2022.

The claims against Melissanidis and Gianniotis continued while the auditor settlements went through administration. Gianniotis reached an agreement in principle in October 2022, and the court stayed the case as to him on October 27; Melissanidis followed, and the two agreed to pay a combined $11,949,999, approximately $11.95 million. Judge Buchwald approved that settlement on October 19, 2023, bringing the class recoveries to $41.749 million.

False Sales in Japan and Options Priced in Hindsight

International Rectifier, a power-management semiconductor maker in El Segundo, California, told investors on April 9, 2007 not to rely on its financial statements for several periods in 2005 and 2006 because of an investigation into “accounting irregularities at a foreign subsidiary” involving “premature revenue recognition of product sales”; the stock fell $2.83 that day, from $38.80 to $35.97. On May 11 the company said the subsidiary had recorded sales for shipments its customers had no obligation to pay for and had routed product to warehouses outside its logistics systems, and it widened the restatement. By November 13, 2007 the audit committee had concluded that no financial statement from September 30, 2003 through December 31, 2006 could be relied upon: the Japan subsidiary had “circumvented established controls and processes to record false or premature sales” on fictitious customer purchase orders, fictitious invoices had been sold under its receivables-financing facilities at up to $23 million a quarter in fiscal 2006 and 2007, ordinary operating costs had been booked as one-time restructuring charges from fiscal 2003 to 2007, and transfer-pricing and other tax problems from fiscal 2002 to 2007 had cost the company a $74 million payment to the Internal Revenue Service and state agencies. The chief executive, Alex Lidow, the chief financial officer, Michael McGee, and the executive vice president for global sales, Robert Grant, all left. Lavallee was the lead day-to-day partner for the Massachusetts Laborers’ Pension Fund, co-lead plaintiff with the General Retirement System of the City of Detroit, in In re International Rectifier Securities Litigation before Judge John F. Walter in the Central District of California, for a class that bought the stock from July 31, 2003 through February 11, 2008. On December 31, 2008 Judge Walter largely sustained the second amended complaint against the company and the remaining individual defendants, and discovery began. After motion practice and trial preparation the case settled for $90 million, announced July 31, 2009, half from the company’s insurers and half from the company; Judge Walter granted preliminary approval on September 25, 2009 and final approval on February 8, 2010. At the approval hearing he said that “In this case, the papers were excellent,” that “the motion practice in this case was, quite frankly, very intellectually challenging and well done,” and that to prosecute the action successfully against “such formidable opponents” was “an impressive feat.”

KLA-Tencor, the San Jose maker of semiconductor process-control equipment, appeared in The Wall Street Journal on May 22, 2006 in an article headed “Five More Companies Show Questionable Options Pattern,” which found that its executives had received 2001 option grants on “unusually fortunate days.” The stock fell more than 10 percent, $935 million of market value. The board formed a special committee on May 24; on June 29 the committee reported its preliminary conclusion that the measurement dates for some past grants “likely differ from the recorded grant dates of such awards,” and that day the securities class action was filed. On October 16, 2006 the company announced that it would restate its financial statements to correct the accounting for retroactively priced stock options, with added non-cash compensation charges it said “will not exceed $400 million,” and it ended every aspect of its employment relationship with Kenneth Schroeder, its president and chief operating officer from 1991 to 1999 and chief executive from 1999 to 2005. On June 25, 2007 the Securities and Exchange Commission sued the company and Schroeder, charging that Schroeder had “repeatedly engaged in backdating after becoming CEO in 1999,” including by “pricing large awards of options to himself” that were never disclosed to shareholders, and that he had made a 2005 award after company counsel advised that retroactively selecting grant dates without adequate disclosure was improper; the company consented to a permanent injunction on July 25, 2007. Lavallee held the day-to-day role for the Louisiana Municipal Police Employees’ Retirement System, co-lead plaintiff with the Philadelphia Board of Pensions and Retirement and the Police and Fire Retirement System of the City of Detroit, in In re KLA-Tencor Corp. Securities Litigation before Judge Charles R. Breyer in the Northern District of California, with Berman Tabacco chairing the executive committee of plaintiffs’ counsel. The company announced a $65 million settlement on January 24, 2008 that released all defendants, Schroeder among them, and Judge Breyer gave it final approval that year, telling plaintiffs’ counsel, “Congratulations for working very hard on this.” International Rectifier and KLA-Tencor produced purchaser recoveries, class funds for the people who had bought the stock; Oracle’s remedy ran to the corporation itself.

Andexxa, Earnings Per Share and a Lead Recycler

Portola Pharmaceuticals sold Andexxa, a drug that reverses the anticoagulants apixaban and rivaroxaban in patients with life-threatening bleeding. Investors who bought its stock from January 8, 2019 through February 28, 2020, including in a secondary public offering, alleged that the company had recognized revenue in violation of ASC Topic 606 while claiming compliance with GAAP, had under-reserved for returns of the drug, and had overstated how regularly hospitals used Andexxa and for what kinds of bleeds; the alleged inflation in the stock fell from $2.56 a share to $0.82 across February 27 and 28, 2020, when the company reported its 2019 results. The Alameda County Employees’ Retirement Association was appointed lead plaintiff on April 22, 2020 in Hayden v. Portola Pharmaceuticals before Judge Vince Chhabria, with Berman Tabacco as sole lead counsel and Lavallee as the lead partner overseeing the lead plaintiff. Judge Chhabria sustained the third amended complaint on January 20, 2022. The defendants then produced more than 32,000 documents, over 211,000 pages, and seven depositions were taken alongside third-party discovery; the class certification motion was filed on February 17, 2022; and after a full-day mediation before Robert A. Meyer on May 24, 2022 the parties reached agreement on June 8 for $17.5 million, an estimated $0.62 per affected share before costs. Judge Chhabria gave preliminary approval on October 31, 2022 and final approval on March 6, 2023.

Healthcare Services Group provides housekeeping, laundry and dining services to hospitals and nursing homes, and for years its quarterly earnings per share met or nearly met analysts’ consensus estimates. Utah Retirement Systems, with Berman Tabacco as sole lead counsel, sued the company and several of its executives in the Eastern District of Pennsylvania, alleging that they had concealed “earnings management” practices that let the company consistently meet or beat its EPS estimates, and an ongoing SEC investigation into those practices. On August 24, 2021 the SEC announced its findings: in 2014 and 2015 the company had failed to accrue and disclose material loss contingencies from the settlement of private litigation when GAAP required, and recording them on time would have cut the income it reported; instead it reported quarterly EPS that met or nearly met consensus, with multiple quarters of EPS growth, including record-high EPS. The company paid a $6 million civil penalty; its former chief financial officer, John C. Shea, paid $50,000 and was suspended from practicing before the Commission as an accountant; its controller, Derya D. Warner, paid $10,000. It was the third case brought under the Enforcement Division’s EPS Initiative, which uses data analytics to find earnings management. “HCSG reported EPS that met analyst estimates for multiple quarters as a result of accounting violations,” said Gurbir Grewal, the division’s director. On January 12, 2022 Judge Eduardo C. Robreno approved a $16.8 million settlement in a 33-page memorandum that found each Rule 23(e) factor satisfied, the conclusion, in his word, “clear,” and found that Berman Tabacco had shown the sustained advocacy the Third Circuit requires of class counsel. Lavallee was the lead partner overseeing the lead plaintiff.

Aqua Metals promoted AquaRefining, a process it said could revolutionize the recycling of lead from spent batteries, and investors who bought its stock from May 19, 2016 to November 9, 2017 alleged that the company had misled them about how far the technology had actually been implemented and how it was operating. The Plymouth County Retirement Association led the case in the Northern District of California, with Berman Tabacco and Levi & Korsinsky as co-lead counsel and Lavallee, with Kristin J. Moody, appearing for the lead plaintiff. The stipulation of settlement was signed on July 2, 2021. On March 2, 2022 Judge Haywood S. Gilliam Jr. certified the settlement class, found the notice adequate and approved the $7 million agreement as fair, adequate and reasonable, and on March 8 he entered a stipulated final judgment dismissing the action with prejudice and binding the defendants, the lead plaintiff and every settlement class member. In Portola, Healthcare Services Group and Aqua Metals alike, Lavallee oversaw the lead plaintiffs and coordinated the pleadings, discovery, negotiation, notice and court review, each on its own issuer’s record, through approval and administration.

Before a Fund Commits Its Name

Most of that work begins before any complaint exists. Lavallee serves as the principal contact for many of Berman Tabacco’s investor clients and sits on the firm’s New Case Investigations Team, which reviews potential securities violations to decide whether a case meets the firm’s standards. Before a complaint is filed she evaluates the issuer’s statements, the later disclosures, the client’s transactions, possible causation, class definitions, filing options and the responsibilities of serving as lead plaintiff. The Private Securities Litigation Reform Act, in force since 1995, requires a fraud complaint to plead each challenged statement and the defendant’s state of mind with particularity, and her screening applies those requirements before a public fund or other investor commits its name and its beneficiaries to litigation.

Portfolio losses and legally recoverable damages can differ, because causation, traceability, corrective disclosures, defenses and class definitions all shape the available claim, and Lavallee brings those questions into the client’s decision whether to seek appointment as lead plaintiff, remain in a class or pursue an investor-specific action. A class action aggregates investor claims that satisfy Rule 23; an opt-out action lets an investor control its own claims and proof; a derivative case seeks relief for the corporation itself, and she advises according to the injury, the available evidence and the remedy each form makes possible. She has represented public pension funds in opt-out cases as well as class actions, and for an opt-out decision she compares the client’s projected class recovery with its transaction volume, the claims available to it, the filing deadlines, the discovery burden and the value of a separate recovery. Her completed matters have involved financial reporting, internal controls, offering documents, transaction records and changing market rules, and the remedy has followed the injury: offering-specific underwriting analysis in IndyMac, separately approved agreements coordinated in Aegean Marine, a charitable commitment made in the corporation’s name in Oracle.

Lavallee has also tried cases to juries and to the bench, including an individual action in which the jury found for the plaintiffs on a state-law misrepresentation claim and a derivative bench trial, and she prepares the evidence in a securities case for admissibility and persuasion at trial as well as for the pleadings. She has written for the trustees who hire her: on the Supreme Court’s 2013 decision in Amgen, which she described as a victory for investors in class actions; on the question the Court agreed to hear in 2014, whether investors must file individual actions to preserve their Securities Act claims; on a study finding that securities litigation deters a company’s peers from similar misconduct; on the SEC’s and Warren Buffett’s scrutiny of non-GAAP accounting; and, in Law360 in February 2023, on the new executive-pay rules for the coming proxy season. She co-chaired the Cambridge Cross-Border Litigation Forum in 2016, and on March 26, 2026 she sat on the Bar Association of San Francisco’s annual review of developments in securities litigation.

Veradigm and PennyMac

Lavallee was trained in both of Canada’s legal traditions. She took a college degree in health sciences and pure and applied sciences from Vanier College in Montreal in 1986, on the dean’s list; a civil-law degree, the LL.B., from the Université de Montréal in 1989; and a common-law LL.B. from Osgoode Hall Law School in Toronto in 1991. She is admitted in California, before the four federal district courts in the state and before the Ninth Circuit, and she belongs to the National Association of Public Pension Attorneys, the State Association of County Retirement Systems, Women in Securities, the Bar Association of San Francisco and the Federal Bar Association. She recently served on the board of trustees of an independent school, as co-chair of the board, chair of its trustees committee and secretary.

Lavallee oversees two pending cases. In Erwin v. Veradigm Inc., in the Northern District of Illinois, Judge Lindsay C. Jenkins appointed the Alameda County Employees’ Retirement Association sole lead plaintiff on March 1, 2024 and Berman Tabacco sole lead counsel, with Lavallee, Daniel Barenbaum and Jeffrey V. Rocha on the team. The complaint alleges that Veradigm’s statements about its financial results and internal controls were false: on February 28, 2023 the company disclosed that it had “detected certain internal control failures related to revenue recognition that had occurred over the prior six quarters,” first estimating about $20 million in overstated revenue; on March 22, 2023 it said its quarterly filings for 2021 and 2022 could no longer be relied upon and would have to be restated; it later found misstatements reaching back to 2020; its chief executive and chief financial officer resigned on December 8, 2023 after an audit committee investigation; and on February 29, 2024 Nasdaq delisted the stock because the company could not file its overdue periodic reports. In Verthelyi v. PennyMac Mortgage Investment Trust, in the Central District of California, holders of two series of PennyMac’s fixed-to-floating preferred shares allege that when LIBOR ended the trust replaced the floating rate with a fixed one instead of moving to the Secured Overnight Financing Rate as the Adjustable Interest Rate (LIBOR) Act and the Federal Reserve’s Regulation ZZ require, and they seek restitution and an injunction under California’s Unfair Competition Law for everyone who has owned the shares since August 25, 2023. On February 26, 2025 Judge Michael W. Fitzgerald denied both defendants’ motions to dismiss in their entirety.