Sean: Assuming that the class lawsuit against CYDY referenced in 2 different news reports this morning is the same one commenced in March, 2021, then the Statute of Limitations would obviously not be a defense, and my earlier post on that subject should be disregarded. Nevertheless, while having no idea why this old lawsuit would suddenly be the focus of 2 separate news reports this morning, my instinct is still to doubt the threat level that this 4 year old class action poses to CYDY.
While I have not read the allegations in the class action complaint, in order for CYDY to be liable for the conduct of its CEO under the doctrine of Respondent Superior, Nader's conduct would have had to have been within the scope of his authority as CEO and to further the interests of CYDY, or have been the result of CYDY's failure to reasonably supervise his conduct. My second hand understanding of the securities law violations asserted against Nader and, upon which he was convicted, was that he sold a portion of his CYDY stock before the FDA's Refusal To File was issued knowing that the filed BLA was grossly incomplete and would be rejected by the FDA. Obviously, none of that would have been within the scope of his duties or in furtherance of the interests of CYDY. Moreover, proving by a preponderance of the evidence that appropriate supervision of Nader by CYDY would have prevented his misconduct would also likely be problematic for the plaintiffs.
Additionally, I seem to recall that this old class action is a shareholder derivative suit. If that is so, then the class action plaintiffs would be in the role of representing the interests of CYDY and attempting to recover from Nader on behalf of CYDY for damages caused CYDY by Nader's fraudulent conduct.
Please bear in mind that I was never involved in securities law litigation, have no access to any of these files, and can address this subject matter only on a very limited basis. Consequently, none of the above can or should be considered legal advice. Be that as it may, I'm still not losing any sleep over this matter unless or until I see info far more threatening to CYDY's interests than I have seen thus far.
While I have not read the allegations in the class action complaint, in order for CYDY to be liable for the conduct of its CEO under the doctrine of Respondent Superior, Nader's conduct would have had to have been within the scope of his authority as CEO and to further the interests of CYDY, or have been the result of CYDY's failure to reasonably supervise his conduct. My second hand understanding of the securities law violations asserted against Nader and, upon which he was convicted, was that he sold a portion of his CYDY stock before the FDA's Refusal To File was issued knowing that the filed BLA was grossly incomplete and would be rejected by the FDA. Obviously, none of that would have been within the scope of his duties or in furtherance of the interests of CYDY. Moreover, proving by a preponderance of the evidence that appropriate supervision of Nader by CYDY would have prevented his misconduct would also likely be problematic for the plaintiffs.
Additionally, I seem to recall that this old class action is a shareholder derivative suit. If that is so, then the class action plaintiffs would be in the role of representing the interests of CYDY and attempting to recover from Nader on behalf of CYDY for damages caused CYDY by Nader's fraudulent conduct.
Please bear in mind that I was never involved in securities law litigation, have no access to any of these files, and can address this subject matter only on a very limited basis. Consequently, none of the above can or should be considered legal advice. Be that as it may, I'm still not losing any sleep over this matter unless or until I see info far more threatening to CYDY's interests than I have seen thus far.
18
