Broker-Dealer Litigation - Greenberg Traurig LLP

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In re Novatel Wireless Securities Litigation, 2011 WL 5873113 (S.D. Cal. Nov. 23, 2011).
Plaintiffs brought a class action suit against defendant corporation and various of its
corporate officers. Plaintiffs alleged that defendants engaged in insider trading by creating a
fraudulent scheme to inflate Novatel’s stock so that defendants could sell their stock for profit in
violation of the Securities Exchange Act of 1934. Defendants moved for summary judgment,
alleging, inter alia, the affirmative defense that any sale of stock was made pursuant to a Rule
10b5-1 plan. Such plan is a defense to an insider trading claim so long as the individual did not
know the inside information at the time he or she entered into the plan, and the individual
exercised no discretion over his sales after adoption of the plan. However, the court dismissed
this affirmative defense because it found that each defendant entered a new or amended 10b5-1
plan during the time frame that plaintiffs alleged defendants had inside information.
Accordingly, the court denied defendants’ motion for summary judgment and determined that a
genuine issue of material fact existed as to whether the defendants executed trades based on
inside information.
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In re Cell Therapeutics, Inc. Class Action Litigation, 2011 WL 444676 (W.D. Wash. Feb. 4,
2011).
Plaintiffs filed a complaint against defendants alleging violations of Section 10(b) and
Rule 10b-5 of the Securities Exchange Act of 1934 relating to statements made by defendants
that a drug it produced would be approved by the FDA under a fast track approval process. The
drug failed to be approved and the company’s stock dropped by 50% in a single day. Defendants
filed a motion to dismiss based on, inter alia, the safe harbor provision of the Private Securities
Litigation Reform Act of 1995 (“PSLRA”), which protects certain forward-looking statements
from liability under the Exchange Act. The court, in refusing to grant defendants’ motion, found
that the majority of the statements defendants made were not forward-looking. While statements
that the company had hopes for approval were forward-looking, statements that the drug had
been “fast-tracked” and other similar present-fact statements were not forward-looking to fall
within the safe harbor provision. Accordingly, the court denied defendants’ motion.
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In re Bankatlantic Bancorp, Inc. Securities Litigation, 2011 WL 1585605 (S.D. Fla. Apr. 25,
2011).
Plaintiffs, purchasers of defendants’ common stock, brought a class action suit against
defendants contending that defendants misrepresented and concealed the true quality and value
of certain assets in defendants’ loan portfolio in violation of the Securities Exchange Act of
1934. After trial, defendants brought a motion for judgment as a matter of law and a motion for
new trial. Defendants argued, inter alia, that the court committed reversible error by instructing
the jury that four statements made by defendants were false, when the statements were protected
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