- within Consumer Protection, Insolvency/Bankruptcy/Re-Structuring and Insurance topic(s)
Introduction
Welcome to the Q3 2025 edition of A&O Shearman's Fifth Circuit Securities Litigation Quarterly. As public companies and financial institutions continue to migrate to Texas, our Texas-based securities litigation team continues to monitor all developments and help our clients navigate the unique landscape for federal securities litigation in the Fifth Circuit.
In our Q3 2025 edition, we cover six new case filings, five district court decisions on pleading stage and class certification issues, and other decisions of note.
New securities class action filings
TESLA (W.D. TEX., 1:25-CV-01213, FILED AUGUST 4, 2025)
Filed on behalf of a putative class of investors who purchased or otherwise acquired Tesla, Inc. securities between April 19, 2023 and June 22, 2025, inclusive
Asserts claims under the Securities Exchange Act of 1934
Alleges Defendants "made false and/or misleading statements and/or failed to disclose that: (i) Tesla overstated the effectiveness of its autonomous driving technology; (ii) there was thus a significant risk that the Company's autonomous driving vehicles, including the Robotaxi, would operate dangerously and/or in violation of traffic laws; (iii) the foregoing increased the likelihood that Tesla would become subject to heightened regulatory scrutiny; (iv) accordingly, Tesla's business and/or financial prospects were overstated; and (v) as a result, the Company's public statements were materially false and misleading at all relevant times."
NUTEX HEALTH (S.D. TEX., 4:25-CV-03999, FILED AUGUST 22, 2025)
Filed on behalf of a putative class of investors who purchased or otherwise acquired Nutex Health Inc. securities between August 8, 2024 and August 14, 2025, inclusive
Asserts claims under the Securities Exchange Act of 1934
Alleges Defendants "made false and/or misleading statements and/or failed to disclose that: (i) HaloMD was achieving lucrative arbitration results for Nutex by engaging in a coordinated scheme to defraud insurance companies; (ii) as a result, to the extent that they were the product of fraudulent conduct, revenues attributable to the Company's engagement with HaloMD in the IDR process were unsustainable; (iii) in addition, the Company overstated the extent to which it had remediated, and/or its ability to remediate, the material weaknesses in its internal controls over financial reporting; (iv) as a result, the Company was unable to effectively account for the treatment of certain of its stock based compensation obligations; (v) as a result, Nutex improperly calculated these stock based compensation obligations as equity rather than liabilities; (vi) the foregoing increased the risk that the Company would be unable to timely file certain financial reports with the SEC; (vii) accordingly, Nutex's business and/or financial prospects were overstated; and (viii) as a result, Defendants' public statements were materially false and misleading at all relevant times."
FLUOR (N.D. TEX., 3:25-CV-02496, FILED SEPTEMBER 15, 2025)
Filed on behalf of a putative class of investors who purchased or otherwise acquired Fluor Corporation securities between February 18, 2025 and July 31, 2025, inclusive
Asserts claims under the Securities Exchange Act of 1934
Alleges Defendants "made false and/or misleading statements and/or failed to disclose that: (i) costs associated with the Gordie Howe, I-635/LBJ, and I-35 projects were growing because of, inter alia, subcontractor design errors, price increases, and scheduling delays; (ii) the foregoing, as well as customer reduction in capital spending and client hesitation around economic uncertainty, was having, or was likely to have, a significant negative impact on the Company's business and financial results; (iii) accordingly, Fluor's financial guidance for FY 2025 was unreliable and/or unrealistic, the effectiveness of the Company's risk mitigation strategy was overstated, and the impact of economic uncertainty on the Company's business and financial results was understated; and (iv) as a result, Defendants' public statements were materially false and misleading at all relevant times."
QUANEX BUILDING PRODUCTS (S.D. TEX., 4:25-CV-04453, FILED SEPTEMBER 19, 2025)
Filed on behalf of a putative class of investors who purchased or otherwise acquired Quanex Building Products Corporation securities between December 12, 2024 and September 5, 2025, inclusive
Asserts claims under the Securities Exchange Act of 1934
Alleges Defendants "failed to disclose to investors: (1) the Company's procedures and policies regarding tooling and equipment maintenance in its Tyman Mexico facility were significantly 'underinvested'; (2) as a result, the Company's tooling and equipment conditions had significantly degraded to near 'catastrophic' levels; (3) that, as a result of the foregoing, the Company was likely to incur significant costs, 'pushing out the timing' of expected benefits from the Tyman integration; (4) that Quanex had previously identified the foregoing issues; and (5) that, as a result of the foregoing, Defendants' positive statements about the Company's business, operations, and prospects were materially misleading and/or lacked a reasonable basis."
KBR (S.D. TEX., 4:25-CV-04464, FILED SEPTEMBER 19, 2025)
Filed on behalf of a putative class of investors who purchased or otherwise acquired KBR, Inc. securities between May 6, 2025 and June 19, 2025, inclusive
Asserts claims under the Securities Exchange Act of 1934
Alleges Defendants "made false and/or misleading statements and/or failed to disclose that: (1) Despite the knowledge that the U.S. Department of Defense's Transportation Command (TRANSCOM) had, for months, had material concerns with Homesafe's ability to fulfill the Global Household Goods Contract, Defendants claimed that the partnership was without issue, and would ramp up in future quarters; and (2) as a result, Defendants' statements about KBR's business, operations, and prospects were materially false and misleading and/or lacked a reasonable basis at all relevant times."
RCI HOSPITALITY (S.D. TEX., 4:25-CV-04477, FILED SEPTEMBER 21, 2025)
Filed on behalf of a putative class of investors who purchased or otherwise acquired RCI Hospitality Holdings, Inc. securities between December 15, 2021 and September 16, 2025, inclusive
Asserts claims under the Securities Exchange Act of 1934
Alleges Defendants "made false and/or misleading statements and/or failed to disclose that: (1) Defendants engaged in tax fraud; (2) Defendants committed bribery to cover up the fact that they committed tax fraud; (3) as a result, Defendants understated the legal risk facing the Company; and (4) as a result, Defendants' statements about its business, operations, and prospects, were materially false and misleading and/or lacked a reasonable basis at all relevant times."
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