Genius Brands Securities Fraud Claims Revived in Part on Appeal

Genius Brands International Inc. will need to defend securities fraud allegations again in federal court, after a panel of judges in the US Court of Appeals for the Ninth Circuit partially revived a proposed class action on Friday.

The revived claims include allegations that the children’s entertainment company concealed its relationship with stock promoter PennyStocks.com, misrepresented acquisition interest from Disney or Netflix, and overstated its rights to the collected works of comic book author Stan Lee, the Ninth Circuit said.

Shareholders adequately pleaded that Genius misled its investors by stating it hadn’t paid any outside party to solicit the purchase ...