Jamie M. McCall

Current Cases

• Catalent, Inc.

  This securities fraud class action brings claims against Catalent, Inc. (“Catalent” or the “Company”), an outsourced drug manufacturer for pharmaceutical and biotech companies, and certain of its former senior executives (together, “Defendants”). The case arises out of Defendants’ alleged material misrepresentations and omissions regarding the Company’s key production facilities and revenue in the face of declining demand for COVID-19 vaccine products. 

  According to Plaintiffs, Catalent initially benefitted from the COVID-19 pandemic, which increased demand for Catalent’s services and catapulted the Company to record high revenues. However, as demand for COVID-19 vaccines waned as a critical mass of Americans were vaccinated, so too did demand for Catalent’s services, leaving the Company with diminishing revenues, a bloated headcount, excess production capacity at its newly expanded facilities, and increasing safety and quality control issues at key production facilities in Bloomington, Indiana; Brussels, Belgium; and Harmans, Maryland.

  Rather than admit this truth, however, Defendants made a set of false and misleading statements during the Class Period touting: (i) the good condition and well-maintained nature of Catalent’s key production facilities (the “Quality Control Statements”); (ii) the Company’s compliance with Generally Accepted Accounting Principles (the “GAAP Compliance Statements”); and (iii) non-COVID related demand for the Company’s products and services (the “Non-Vaccine Demand Statements”).

  On September 15, 2023, Plaintiffs filed a 187-page complaint on behalf of a putative class of investors alleging that Defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. On November 15, 2023, Defendants moved to dismiss the complaint, which Plaintiffs opposed on January 12, 2024. Briefing on the motion was completed on February 15, 2024.

  On June 28, 2024, Honorable Judge Zahid N. Quraishi granted in part and denied in part Defendants’ motion to dismiss. In the Order, Judge Quraishi held that a subset of Plaintiffs’ alleged Quality Control Statements and GAAP Compliance Statements were actionably misleading. The case is now in fact discovery.

• General Electric Company

  This securities fraud class action case arises out of alleged misrepresentations made by General Electric (“GE”) and its former Chief Financial Officer, Jeffrey S. Bornstein (together, “Defendants”), regarding the use of factoring to conceal cash flow problems that existed within GE Power between March 2, 2015, and January 24, 2018 (the “Class Period”).
  
  GE Power is the largest business in GE’s Industrials operating segment. The segment constructs and sells power plants, generators, and turbines, and also services such assets through long term service agreements (“LTSAs”). In the years leading up to the Class Period, as global demand for traditional power waned, so too did GE’s sales of gas turbines and its customer’s utilization of existing GE-serviced equipment.  These declines drove down GE Power’s earnings under its LTSAs associated with that equipment.  This was because GE could only collect cash from customers when certain utilization levels were achieved or upon some occurrence within the LTSA, such as significant service work.
  
  Plaintiffs allege that in an attempt to make up for these lost earnings, GE modified existing LTSAs to increase its profit margin and then utilized an accounting technique known as a “cumulative catch-up adjustment” to book immediate profits based on that higher margin.  In most instances, GE recorded those cumulative catch-up earnings on its income statement long before it could actually invoice customers and collect cash under those agreements. This contributed to a growing gap between GE’s recorded non-cash revenues (or “Contract Assets”) and its industrial cash flows from operating activities (“Industrial CFOA”).  

  In order to conceal this increasing disparity, Plaintiffs allege that GE increased its reliance on long-term receivables factoring (i.e., selling future receivables to GE Capital, GE’s financing arm, or third parties for immediate cash).  Through long-term factoring, GE pulled forward future cash flows, which it then reported as cash from operating activities (“CFOA”).  GE relied on long-term factoring to generate CFOA needed to reach publicly disclosed cash flow targets.  Thus, in stark contrast to the true state of affairs within GE Power—and in violation of Item 303 of Regulation S-K—GE’s Class Period financial statements did not disclose material facts regarding GE’s factoring practices, the true extent of the cash flow problems that GE was attempting to conceal through receivables factoring, or the risks associated with GE’s reliance on factoring. 

  Eventually, however, GE could no longer rely on this unsustainable practice to conceal its weak Industrial cash flows.  As the truth was gradually revealed to investors—in the form of, among other things, disclosures of poor Industrial cash flows and massive reductions in Industrial CFOA guidance—GE’s stock price plummeted, causing substantial harm to Plaintiffs and the Class.

  In January 2021, the Court sustained Plaintiffs’ claims based on allegations that GE failed to disclose material facts relating its practice of and reliance on factoring, in violation of Item 303, and affirmatively misled investors about the purpose of GE’s factoring practices. In April 2022, following the completion of fact discovery, the Court granted Plaintiffs’ motion for class certification, certifying a Class of investors who purchased or otherwise acquired GE common stock between February 29, 2016 and January 23, 2018.  In that same order, the Court granted Plaintiffs’ motion for leave to amend their complaint to pursue claims based on an additional false statement made by Defendant Bornstein.  The Court had previously dismissed these claims but, upon reviewing Plaintiffs’ motion—based on evidence obtained through discovery—permitted the claim to proceed.

  On September 28, 2023, the Court entered an order denying Defendants’ motion for summary judgment, sending Plaintiffs’ claims to trial. In March 2024, the Court denied Defendants’ motion for reconsideration of its summary judgment decision. With trial set to begin in November 2024, in October, the parties agreed to resolve the matter for $362.5 million, pending the Court’s approval.

  Read Fifth Amended Consolidated Class Action Complaint Here

  Read Opinion and Order Granting and Denying in Part Motion to Dismiss Here

  Read Order Granting Motion for Class Certification and for Leave to Amend Here

  Click Here to Read the Class Notice

  Read Opinion and Order Here (9/28/23)

  Read Memorandum Opinion & Order Here (3/21/24) 

• Goldman Sachs Group, Inc.

  This securities fraud class action case arises out of Goldman Sachs’ role in the 1Malaysia Development Berhad (“1MDB”) money laundering scandal, one of the largest financial frauds in recent memory.

  In 2012 and 2013, Goldman served as the underwriter for 1MDB, the Malaysia state investment fund masterminded by financier Jho Low, in connection with three state-guaranteed bond offerings that raised over $6.5 billion. Goldman netted $600 million in fees for the three bond offerings—over 100 times the customary fee for comparable deals.

  In concert with Goldman, Low and other conspirators including government officials from Malaysia, Saudi Arabia, and the United Arab Emirates ran an expansive bribery ring, siphoning $4.5 billion from the bond deals that Goldman peddled as investments for Malaysian state energy projects. In actuality, the deals were shell transactions used to facilitate the historic money laundering scheme. Nearly $700 million of the diverted funds ended up in the private bank account of Najib Razak, Malaysia’s now-disgraced prime minister who was convicted for abuse of power in 2020. Other funds were funneled to Low and his associates and were used to buy luxury real estate in New York and Paris, super yachts, and even help finance the 2013 film “The Wolf of Wall Street.”

  AP7 filed a 200-page complaint in October 2019 on behalf of a putative class of investors alleging that Goldman and its former executives, including former CEO Lloyd Blankfein and former President Gary Cohn, violated Section 10(b) of the Securities Exchange Act by making false and misleading statements about Goldman’s role in the 1MDB fraud. As alleged, when media reports began to surface about the collapse of 1MDB, Goldman denied any involvement in the criminal scheme. Simultaneously, Goldman misrepresented its risk controls and continued to falsely tout the robustness of its compliance measures. Following a series of revelations about investigations into allegations of money laundering and corruption at 1MDB, Goldman’s stock price fell precipitously, causing significant losses and damages to the Company’s investors.

  In October 2020, the U.S. Department of Justice announced that Goldman’s Malaysia subsidiary had pled guilty to violating the Foreign Corrupt Practices Act (“FCPA”) which criminalizes the payment of bribes to foreign officials, and that Goldman had agreed to pay $2.9 billion pursuant to a deferred prosecution agreement. This amount includes the largest ever penalty under the FCPA.

  On June 28, 2021, The Honorable Vernon S. Broderick of the U.S. District Court for the Southern District of New York sustained Plaintiff's complaint in a 44-page published opinion. On July 31, 2023, the Court granted Plaintiff’s motion to amend the complaint to conform the pleadings to the evidence adduced during discovery, which is now complete. 

  Plaintiff first moved for class certification in November 2021. While that motion was pending, the Court granted Plaintiff’s motion to amend the complaint and subsequently ordered that Plaintiff’s motion for class certification be newly briefed in light of the amended pleading. On September 29, 2023, Plaintiff renewed its motion for class certification. On April 5, 2024, Magistrate Judge Katharine H. Parker of the U.S. District Court for the Southern District of New York issued a 59-page Report and Recommendation recommending that the District Court grant Lead Plaintiff AP7’s motion to certify the class. Meanwhile, expert discovery is ongoing.

  Read Third Amended Class Action Complaint Here

  Read Opinion and Order Granting and Denying in Part Motion to Dismiss Here 

  Read the Report and Recommendation on Motion for Class Certification Here

• Humana, Inc.

  Defendant Humana Inc. is an insurance and healthcare company that provides medical benefit plans to approximately 16.3 million people. This securities fraud class action arises out of Humana’s materially false or misleading statements concerning the profitability and quality of its core Medicare Advantage business, which generates the vast majority of the Company’s revenue. Medicare Advantage plans provide health insurance to seniors over the age of 65 and those under 65 with particular disabilities.

  On November 20, 2024, Plaintiff filed a 215-page complaint on behalf of a putative class of investors alleging that Defendants Humana, its former Chief Executive Officer, Bruce D. Broussard, and current Chief Financial Officer, Susan Diamond, violated Sections 10(b) and 20(a) of the Securities Exchange Act.

  As alleged in the Complaint, Humana reaped record profits during the height of the COVID-19 pandemic due to abnormally low use of healthcare services by the Company’s Medicare Advantage members. By mid-2022, investors were concerned that Humana would see heightened healthcare utilization, and therefore lower profits, as its Medicare Advantage members began seeking care that had been deferred during the pandemic. For Humana, member utilization and the associated cost of providing member benefits is the key measure of the Company’s profitability. During the Class Period, Defendants assured investors that the Company was continuing to experience favorable utilization trends in its Medicare Advantage business, and downplayed worries about future utilization increases. In addition, Defendants touted as a competitive advantage and revenue-driver Humana’s Star ratings—a quality measure assigned each year by the Centers for Medicare & Medicaid Services (“CMS”) that had historically resulted in billions of dollars in additional payments to Humana.

  However, unbeknownst to investors, as the effects of the pandemic abated, Defendants knew that the depressed utilization had created a massive backlog of healthcare needs, particularly elective surgical procedures. By the beginning of the Class Period in July 2022, Defendants knew that there was a surge of Medicare Advantage members seeking previously deferred care, which was significantly increasing the Company’s benefit expenses. Moreover, Defendants knew that the Company’s own internal analyses showed that Humana faced a significant downgrade in its Star ratings, jeopardizing billions in Medicare revenue.

  The Complaint alleges that Defendants actively concealed the Company’s increased Medicare Advantage utilization through improper denials of claims for medical services and aggressive prior authorization practices. At the same time, Defendants undertook a series of destructive cost-cutting measures and headcount reductions. These cost-cutting measures led to declines in the quality of Humana’s Medicare Advantage benefit plans, and ultimately, its Star ratings by hamstringing the departments responsible for ensuring that Humana’s members had access to high quality, accessible, and efficient healthcare.

  The truth regarding Humana’s increased utilization began to emerge in June 2023, causing a series of stock price declines in the latter half of 2023 and early 2024. Throughout this period, Defendants continued to tout the Company’s Star ratings and claimed that they could offset the Company’s increased utilization costs through further cost cuts. Then, in October 2024, the truth regarding the dramatic decline in Humana’s Medicare Advantage plans was revealed when the Company’s significantly degraded Star ratings were released by CMS, causing another precipitous drop in Humana’s stock price.

  Read Amended Class Action Complaint Here

• Kessler Topaz Achieves Class Certification Win in 1MDB Fraud Suit Against Goldman Sachs

  April 9, 2024
• Former Federal Prosecutor Jamie M. McCall Joins Kessler Topaz Meltzer & Check Securities Litigation Group

  September 15, 2020