Broker-Dealer Litigation - Greenberg Traurig LLP

from Rule 10b-5 liability as forward-looking statements. According to defendants, Eleventh
Circuit precedent essentially held that non-forward looking statements were automatically
protected by the safe harbor provision if such statements were coupled with forward-looking
components. The court disagreed. Rather, the court found that the Eleventh Circuit, in Harris v.
Ivax, 182 F.3d 799 (11th Cir. 1999), assessed the applicability of the safe harbor provision to
statements that allegedly failed to include the risk of a certain situation occurring, namely the
possibility of a goodwill write-down. The court found that Harris stood for the proposition that a
mixed statement is still forward-looking if it simply contains an omission of material risk factors
for the forward-looking statement. On the other hand, statements are not protected by the safe
harbor provision when any of the non-forward looking statements are misleading omissions or
misrepresentations. In the instant case, the court held that defendants’ statements were not
simply omissions of material risk factors, but statements of what defendants allegedly knew.
Accordingly, the court denied defendants’ motion on the basis that the statements were not
protected under the safe harbor provision of the Private Securities Litigation Reform Act of
1995.
In re Immucor, Inc. Securities Litigation, 2011 WL 3844221 (N.D. Ga. Aug. 29, 2011).
C.1.f
Plaintiffs alleged defendant made false and misleading statements in violation of Section
10(b) of the Securities Exchange Act of 1934 in relation to its compliance with FDA regulations,
as well as its participation in an illegal price-fixing scheme. Specifically, plaintiffs alleged that
defendants made false and misleading statements based on its commitment to quality and its
belief that the company was in compliance with FDA regulations. Defendant, in a motion to
dismiss, argued that any statements made in connection with plaintiffs’ allegations were merely
statements of corporate optimism, and were protected under the safe harbor provision of the
Private Securities Litigation Reform Act of 1995 as mere statements of belief. The court, in
denying defendants’ motion, found that the statements were not forward-looking, as defendants
used the term “ongoing” and used the present tense in various statements. Accordingly, these
statements were referencing the current state of the company. Moreover, defendant’s use of the
term “believes” did not bring the statements within the safe harbor provision. Therefore, the
court denied defendant’s motion to dismiss.
g. Other
C.1.g
Janus Capital Group, Inc. v. First Derivative Traders, 131 S.Ct. 2296 (2011).
Plaintiffs asserted a cause of action against a parent company, who created a mutual fund,
and the mutual fund itself. Although the two entities maintained their legal independence, the
plaintiffs argued that both the parent company and the mutual fund were liable under Rule 10b-5
of the Securities Exchange Act of 1934 because they made material representations within the
rule. The Supreme Court held that for purposes of Rule 10b-5, the maker of a statement is the
person or entity with ultimate authority over the statement, including its content and whether and
how to communicate it. Accordingly, the Supreme Court found that it was not proper to hold a
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