INSIDE THIS ISSUE

•  Scott+Scott LLP Obtains Denial Of Defendants’ Motion To Dismiss In Akeena Solar Securities Class Action

•  Scott+Scott LLP Achieves A Significant Victory On Behalf Of Regions Financial Corporation’s Shareholders

•  Congress Introduces Bills To Extend Antitrust Leniency Program

•  Agricultural Industries Likely To Face Antitrust Scrutiny

•  Events In the USA

(Flashlit version)

Scott+Scott LLP Obtains Denial Of Defendants’ Motion To Dismiss In Akeena Solar Securities Class Action

On May 20, 2010, Scott+Scott LLP attorneys scored a major victory for investors of Akeena Solar, Inc. (Nasdaq:AKNS) when a U.S. District Court Judge denied Akeena Solar’s motion to dismiss the securities class action complaint filed against the company and two of its officers. Filed in the Northern District of California on December 11, 2009, the lead plaintiffs consolidated class action complaint alleges that, between December 26, 2007 and March 13, 2008 (the “Class Period”), Akeena Solar, a designer and marketer of solar power systems, made materially false and misleading statements regarding the Company’s system installation “backlog,” the value of key contracts, and the marketability of the company’s solar panel system.

Specifically, the complaint charges that, during the Class Period, Akeena Solar overstated its prospects by reporting the company’s purported sales “backlog,” or total unfilled sales orders, as $13.6 million for the upcoming fourth quarter 2007, when, in reality, the company had only logged $10.3 million in sales. As detailed in the complaint, the eventual successor to Akeena Solar’s chief financial officer has since admitted that his predecessor had been booking every new installation contract as backlog regardless of whether the customer intended to take delivery within six months or the status of the customer’s financing.

In addition, the complaint alleges that Akeena deceived investors by touting a supposedly lucrative supply contract and licensing agreement with Suntech Power, the world's largest producer of crystalline silicon solar products. It was later revealed that Akeena Solar had actually agreed to pay Suntech a premium far above market price for solar panels, in large part, to induce Suntech to later enter into a licensing agreement, creating the illusion that the Company had a profitable licensing business. The complaint also alleges that the company concealed latent design defects in Akeena’s Andalay solar panel system from investors.

On March 13, 2008, Akeena revealed substantial losses in its fourth quarter 2007,whichwere significantly higher than investors had been led to expect. In response, Akeena’s common stock, which had traded as high as $16.80 on January 7, 2008, fell precipitously to $6.15 per share that day. In the meantime, Akeena’s chief financial officer sold over $5.6 million of his personal shares at inflated prices near two critical announcements during the Class Period.

Akeena Solar filed its motion to dismiss on February 12, 2010. In their motion, the defendants argue that, among other things, plaintiffs’ complaint failed to plead that Akeena’s statements were false, failed to plead loss causation and failed to demonstrate that the defendants had otherwise intentionally misinformed investors. On March 30, 2010, Scott+Scott attorneys, on behalf of plaintiffs and the class of injured investors, filed an opposition to Akeena’s motion to dismiss. Shortly thereafter, the Court found that there was no need to schedule the customary oral argument on the matter, and denied defendants’ motion to dismiss in its entirety based solely on the pleadings. The federal judge found that the plaintiffs had adequately alleged false or misleading statements by the company, demonstrated a causal connection between the statements to the injury suffered by plaintiffs and the class, and pled sufficient facts to establish the required state of mind of the defendants.

As the case now moves forward, a case management conference is scheduled with the Court on June 14, 2010. At the conference, the parties’ proposed case schedule, including a proposed date for the close of all discovery, and an update on the parties’ settlement efforts will be discussed.

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Scott+Scott LLP Achieves A Significant Victory On Behalf Of Regions Financial Corporation’s Shareholders

On May 6, 2010, Scott + Scott LLP client, the Louisiana Municipal Police Employees Retirement System (“LAMPERS”), obtained an important win in its shareholder derivative litigation against certain current and former officers and directors of Regions Financial Corporation (“Regions”). In a decision that may have significant implications for other recently filed derivative actions pending against the officers and directors of financial institutions, Judge Robert S. Vance, Jr. of the Circuit Court of Jefferson County, Alabama denied the defendants’ motion to dismiss by largely sustaining LAMPERS’ claims against Regions’ management, thereby allowing the action to proceed.

LAMPERS’ lawsuit was filed in May 2009 and claims that defendants breached their fiduciary duties to Regions and its shareholders. Among other things, LAMPERS alleges that, between 2006 and January 2009, Regions’ management failed to appropriately write down approximately $6 billion in goodwill that Regions acquired in 2006 as a result of its merger with AmSouth Bank, despite the fact that AmSouth was heavily exposed to a the declining Florida real estate market and a sharply deteriorating credit market. The complaint also pointed to a June 2008 letter sent to Regions by the United States Securities and Exchange Commission that questioned Regions’ representation in the company’s 2007 annual report that its goodwill was not impaired.

Defendants filed a motion to dismiss the complaint on a procedural basis, arguing that LAMPERS’ failed to make a pre-suit demand on Regions’ Board of Directors as required by the Federal Rules of Civil Procedure. Judge Vance found that LAMPERS was excused from making such a demand because the complaint’s allegations were sufficient to raise a “substantial likelihood of liability” as to at least seven members of Regions’ Board of Directors, which makes a demand futile. In addition, Judge Vance found that LAMPERS was also entitled to proceed with its claim that Regions’ management had wasted corporate assets by paying themselves unjustifiably large salaries. The Court found that in light of Regions’ participation in the Troubled Asset Relief Program (“TARP”), there was a reasonable doubt that the compensation decisions challenged by LAMPERS were “valid” exercises of business judgment.

As a result of this ruling, LAMPERS is now free to proceed with litigating its claims against defendants for issuing false statements, wasting corporate assets and general mismanaging Regions. Judge Vance’s decision is also notable because it is one of the handful of decisions where a shareholder plaintiff has been allowed to proceed against the management of a financial institution with derivative claims stemming from the recent financial crisis.

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Congress Introduces Bills To Extend Antitrust Leniency Program

On April 26, 2010, Senator Kohl (D.WI) along with Senators Leahy (D. VT) and Hatch (R. Utah) introduced the “Antitrust Criminal Penalties Enforcement and Reform Act of 2004 Extension Action of 2010” (S. 3259). Likewise, on May 18, Representative Johnson (D. GA) introduced H.R. 5330. Both bills seek to extend the civil cooperation and leniency and provisions of the Antitrust Criminal Penalties Enforcement and Reform Act of 2004 (“ACPERA”), which are currently set to expire on June 22, 2009.

On June 22, 2004, President George W. Bush signed into law ACPERA. ACPERA had received broad bipartisan support. ACPERA made two significant changes to federal antitrust law.

First, ACPERA substantially increased the criminal penalties for antitrust violations. ACPERA raised the statutory maximum fines from $10 million to $100 million for corporations and $350,000 to $1 million for individuals. ACPERA also increased the maximum jail time for antitrust violations from 3 to 10 years.

Second, ACPERA introduced civil damage limitations, subject to cooperation requirements, for companies who were participants in the United States Department of Justice Antitrust Division’s Corporate Leniency Program. By cooperating with civil plaintiffs, leniency program participants are able to reduce their damages exposure to damages actually attributable to their conduct rather than joint and several liabilities for treble damages normally faced by antitrust defendants.

Congress passed ACPERA 2004 to provide increased incentives for cartel members to turn in themselves and inform upon their fellow co-conspirators. ACPERA supplemented the DOJ’s leniency program, which grants immunity from criminal prosecution to the company and its cooperating executives, by offering informants a reduction in their potential civil damage exposure. Prior to ACPERA’s passage, many viewed the threat of exposure to joint and several liability for treble damages as deterring potential informants. The passage of ACPERA was an effort to remove that obstacle to cooperation with the DOJ. Additionally, ACPERA benefitted private litigants by providing cooperation, similar to what the DOJ received, from one of the defendants.

ACPERA, however, contained a sunset provision on its civil damage limitations and cooperation provisions. As enacted, ACPERA has a five year sunset provision. In June 2009, President Obama signed a one-year extension. Those provisions are now set to expire on June 22, 2010.

The bills introduced in the Senate and the House would further extend ACPERA’s civil damage limitation and cooperation provisions. The Senate bill would make them a permanent part of the law. The House bill would extend them for another five years before once again expiring. Both bills call for the Comptroller General to submit a report on the effectiveness of ACPERA in both DOJ criminal investigation and enforcement and private civil actions to the Senate and House Judiciary Committees within a year of passage.

The bills to extend ACPERA appear to have broad bipartisan support and are supported by numerous groups, including the Antitrust Section of the American Bar Association.

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Agricultural Industries Likely To Face Antitrust Scrutiny

Over the past few decades, many American agricultural industries have operated without the fear of scrutiny from antitrust investigators. The lack of scrutiny over the years has regrettably led to increased consolidation and less competitive markets. For instance, researchers have found that the meatpacking industry in particular has become dominated by only a few firms. In fact, the meatpacking industry is even more consolidated than the banking industry, which is widely recognized as being comprised of firms “too big to fail.”

Federal agencies, however, are now increasing their focus on anticompetitive practices in the agricultural industry. Earlier this year, the U.S. Department of Justice and the U.S. Department of Agriculture began a series of joint public workshops to explore competition in the agricultural industry in order to determine an appropriate role for antitrust and regulatory enforcement. These workshops mark the first time the two departments have come together for public discussions regarding competition and regulation. At the first such workshop in Des Moines, Iowa, U.S. Attorney General Eric Holder stated: “My primary goal is to protect both farmers and consumers from anticompetitive activity…we can also bring lower prices, better quality, and greater choice for consumers.”

Prior to these workshops, the DOJ and USDA issued a call for public comments on the topic. In response, the departments were flooded with over 15,000 comments from farmers, consumers, academics, elected officials and industry organizations that overwhelmingly favored raising the level of scrutiny on potential antitrust violations within the agricultural industry. Included in these responses was a letter signed by 14 state attorney generals who advocated increased enforcement.

The agriculture industry has successfully avoided antitrust investigations because the industry is regulated by a little known government agency and an antitrust statute, called the Packers and Stockyards Act of 1921, that is rarely invoked. The Grain Inspection, Packers and Stockyards Administration (“GIPSA”) is the agency charged with protecting competitive markets within the agriculture industry. Yet, a 2006 audit showed that GIPSA has long avoided complex, antitrust investigations.

GIPSA’s tendency to shy away from antitrust investigations, however, appears to be changing. Indeed, GIPSA is currently investigating anticompetitive behavior in the meatpacking industry. The four largest meatpacking companies, Tyson Foods, JBS, Cargill, and National Beef, account for over 80% of the beef slaughtered in the United States. Such a large concentration of buyer power is characteristic of an “Oligopsony,” or “Monopsony” where a small number of buyers dominate the market (as opposed to a oligopoly or monopoly where a small number of sellers dominate the market). Competition authorities around the world are getting in on the act as well. The European Union’s competition arm recently raided British Polythene Industries (“BPI”) for alleged anticompetitive behavior. BPI is one of the world’s leading producers of agricultural and horticultural plastics and plastic films.

Although the new enforcement atmosphere is positive news for consumers and smaller competitors in the industry, it may still not go far enough. Private enforcement of the laws is also needed in order to improve competition within the industry and prevent future anticompetitive behavior and consolidation. “Fines paid to the government may help deter future anticompetitive conduct, but do not benefit those who were actually injured by the wrongdoing,” said Christopher M. Burke, partner at Scott+Scott LLP and an expert in antitrust litigation and competition related matters. “Those injured parties can stop such conduct and recover their losses through private litigation on an individual lawsuit or a class action.”

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Events In the USA

+ June 2-5, 2010

Oklahoma State Firefighters Association 2010 Convention

Marriott Hotel

Oklahoma City, OK

The OFSA has more than 14,000members representing union and non-union paid firefighters, volunteer firefighters, chief officers and retired firefighters. Membership is available to all active and retired firefighters in Oklahoma.

+ June 16- 18, 2010

NASP- 21st Annual Pension and Financial Services Conference

Swissotel Chicago

Chicago, IL

For more than twenty years, the National Association of Securities Professionals has been a premier non- profit organization providing an elite learning environment for trustees and an exclusive networking opportunity for vendors.

+ June 17- 18, 2010

Stars and Stripes 2010

The Menger Hotel

San Antonio, TX

Financial Research Associates presents their 9th annual National Public Employees’ Retirement Funds Summit. Discussion highlights will include “key strategies for succeeding in the next economic cycle and Fiduciary responsibilities in a new era of risk.

+ June 26-30, 2010

FPPTA

Naples Grand Beach Resort

Naples, FL

The 2010 26th Annual Conference will cover topics including “Who’s Watching Our Investments” and “Pension Realities: Straight Talk in Tough Times.”

Government Finance Officers Association Conferences

+ June 16- 18, 2010

Idaho City Clerks, Treasurers & Finance Officers Association

Idaho Falls, ID

+ June 17-18, 2010

Maryland GFOA

Ocean City, MD

+ June 16- 18, 2010

South Dakota Municipal League

Mitchell, SD

+ June 22, 2010

Vermont GFOA

Cape Cod, MA

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