In re Zagg, Inc. Securities Litigation (Swabb v Zagg, Inc.)

Swab appealed the dismissal of its securities fraud case against Zagg and its former CEO. The panel affirmed. It held that none of the facts plead, individually or as a whole, support a strong inference of intent to deceive or reckless disregard of risk to investors because filing required forms in permissible ways is not indicative of fraud; the CEO was not aware of the omissions in the required disclosure forms and his position as CEO is insufficient to find fraud; the CEO’s removal and Zagg’s adoption of bans on margin accounts after the CEO’s shares were sold to cure deficits in his account were at most indications Zagg decided the ban was better practice; and the CEO’s motive to keep shares high could not overcome the lack of other specific facts indicative of fraud particularly as the CEO publicly disclosed each forced sale. Thus, there were insufficient factual allegations to prove intent or the high bar of conscious disregard and Zagg’s alternative inferences are stronger than Swabb’s allegation of scienter. Thus, dismissal was appropriate.

United States v Saiz

Saiz appealed his sentence arguing his New Mexico conditional discharge charges were not under indictment for guideline purposes. The apneal affirmed. It held that because new Mexico law allows the reimposition of charges if the defendant violates the terms of the discharge, the indictment or information remains in effect and Saiz was thus under indictment when he committed his firearm offenses and the sentencing enhancement applied. The panel rejected the 8th Circuit conclusion to the contrary under a similar Missouri law as the indictment not only serves to provide notice but keeps the charge alive until dismissed or the charges adjudicated.

United States v Barela

Barela appealed his child pornography sentence including conditions of supervised release. The panel reversed in part, affirmed in part and remanded for resent3encing. The panela held that circuit precedent required more than mere use of a peer to peer network, that precedent was not dicta and here there is no evidence of any expectation of anything beyond access to the images and videos on the network. Thus, the sentencing enhancement was improper and the sentence must be vacated and a new sentence imposed. The panel viewed the conditions for plain error and held there was no reversible error because the district court’s failure to provide a statement of reasons for the conditions did not affect the proceeding as there was evidence in the record that Barela needs to be kept form children and his online activities monitored and as there is a circuit split on whether bans on viewing or reading sexually explicit materials is a permissible condition of supervised release, there was no clear or obvious error in imposing it.