Broker-Dealer Litigation - Greenberg Traurig LLP

demise, the facts alleged did not give rise to a strong inference that defendants knew that their
statements were fraudulent or were reckless.
Akamai Technologies, Inc. v. Deutsche Bank AG, 764 F. Supp. 2d 263 (D. Mass. 2011).
Plaintiff, an institutional investor sued a defendant, broker-dealer alleging violations of
federal securities laws. Plaintiff claimed that its broker made various misrepresentations and
omissions of material facts in relating to the risks involved with the purchase of auction-rate
securities (“ARS”) in its account. The court denied defendant’s motion to dismiss holding that
plaintiff’s claims were pleaded with sufficient particularity. Specifically, the complaint included
allegations that plaintiff’s broker failed to disclose or misrepresented the risk of each ARS
transaction, and that the broker knew that the statements in connection with purchase of ARS
were false and misleading. The plaintiff also alleged that that its broker doubled its ARS
holdings just prior to the collapse of the ARS market in February 2008.
Special Situations Fund III, L.P. v. American Dental Partners, Inc., 775 F.Supp.2d 227 (D.Mass.
2011).
Investment partnership that purchased common stock in a corporation brought suit
against corporation and three of its officers for alleged violations of federal securities laws.
Defendants moved to dismiss as required under the heightened pleading standard of the PSLRA.
Plaintiffs alleged that defendant’s statements regarding its future would not change manner of
operations with regard to affiliated businesses. The court denied defendants’ motion to dismiss
holding that complaint satisfied the information and belief requirement for alleging
misstatements, material omissions, scienter and loss causation.
Urman v. Novelos Therapeutics, Inc., 796 F. Supp. 2d 277 (D. Mass. 2011).
Investors brought a class action suit against defendant, biopharmaceutical company for
violations of federal securities laws. Defendant subsequently moved to dismiss for failure to state
a claim in accordance with the heightened pleading standards of the PSLRA. Plaintiffs alleged
that defendants made materially false and misleading statements concerning the success of an
experimental drug. The court granted defendant’s motion finding that corporation’s statement
that patients in its experimental drug trial were living longer than expected was not materially
misleading.
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