Broker-Dealer Litigation - Greenberg Traurig LLP

its’ liquidity problems and plans to raise $15,000,000,000 in dilutive equity financing. The court
found that no loss occurred as a result of defendants’ announcement to offer new equity to
remedy its liquidity problems. Ultimately the court held that the complaint did not adequately
plead that defendants’ concealed the pricing of the offering with requisite particularity.
New Orleans Emps. Ret. Sys. v. Celestica, Inc, 2011 WL 6823204 (2d Cir. Dec. 29, 2011).
The court, denied defendants’ motion to dismiss on the basis that plaintiffs provided
sufficient facts to satisfy the particularity requirement of the Private Securities Litigation Reform
Act of 1995. Plaintiffs’ alleged that defendants recklessly misrepresented the rising volume of
unsold inventory in one of defendant’s facilities. Plaintiffs further relied on confidential
witnesses testimony that provided them with information about rising levels of inventory to
defendants. The court found that although the witnesses were not identified by name in the
complaint, plaintiffs’ descriptions of these persons were sufficiently particular to permit the
strong inference of scienter necessary for plaintiffs to sustain their burden on a motion to
dismiss.
Michael S. Rulle Family Dynasty Trust v. AGL Life Assurance Company, 2011 WL 3510285 (3d
Cir. July 14, 2011).
Plaintiff, life insurance policy owner brought action against defendant, insurer after
policy premiums that had been invested in a Ponzi scheme lost their entire value. The court
granted defendant’s motion to dismiss and plaintiff owner appealed. On appeal, the court held
that policy owner failed to state a securities fraud claim. Specifically, plaintiff failed to meet the
PSLRA heightened pleading requirement because plaintiff did not state how or why defendant
should have known or discovered that 23% of the policy owner’s premiums would be invested
with one manager by a separate entity.
City of Roseville Empls.’ Ret. Sys. al. v. Horizon Lines, Inc, 2011 WL 3695897 (3d Cir. Aug. 24,
2011).
Plaintiffs brought suit against defendants alleging violations of federal securities laws.
Plaintiffs alleged that defendant’s senior executives and managers made false or misleading
statements about the corporation’s financial status. The court found that plaintiffs failed to the
PSLRA heightened pleading standard by failing to properly allege that defendants acted with
scienter when making material false statements about corporation’s good financial health.
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