Broker-Dealer Litigation - Greenberg Traurig LLP

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In re MRU Holdings Securities Litigation, 769 F. Supp. 2d 500 (S.D.N.Y. 2011)
Plaintiffs, investors in corporation that was purchaser, holder, and seller of federal and
private student loans brought class action suit against defendants alleging violations of federal
securities laws. Defendants filed a motion to dismiss for failure to state a claim as required under
the heightened pleading standards of the PSLRA. Specifically, plaintiffs claimed that defendant
issued press releases and investor presentations that omitted fact that the securities issued were
auction rate securities (“ARS”), and provided false assurances to the market concerning its
reliance on the ARS. The court granted defendants’ motions to dismiss finding that plaintiffs
allegations failed to allege with particularity any false or misleading statements by senior
executive officers and directors. The court also held that plaintiffs failed to provide any evidence
of scienter against defendants banker and auditor.
Glaser v. The9, Ltd., 772 F. Supp. 2d 573 (S.D.N.Y. 2011).
Investors brought class action suit against a company alleging violations of federal
securities laws. Defendants filed a motion to dismiss for failure to state a claim as required under
the heightened pleading standards of the PSLRA. Plaintiffs claimed that defendants fraudulently
misrepresented facts relating to the likelihood of their renewal of an exclusive license granted to
them by a third party. The court granted defendants’ motion to dismiss with leave for plaintiffs
to amend finding that plaintiffs failed to adequately plead scienter in showing that defendants
knew about statements it made regarding the progress of the licensing renewal.
In re Sanofi-Aventis Securities Litigation, 774 F. Supp. 2d 549 (S.D.N.Y. 2011).
Investors filed class action suit against French pharmaceutical company and executives
alleging violations of federal securities laws. Defendants moved to dismiss for failure to state a
claim as required under the heightened pleading standards of the PSLRA. Plaintiffs alleged that
defendants misrepresented information regarding the association between an obesity drug,
rimonabant, and suicidality. Plaintiffs alleged that this misrepresentation resulted in losses to
investors upon company’s withdrawal the drug’s application for approval. The court denied and
granted defendants’ motion in part finding that plaintiffs’ omissions claim was not sufficiently
alleged, however, plaintiffs claim based on material defendants’ omissions regarding an FDA
approval letter was sufficiently alleged. The court also held that plaintiffs sufficiently alleged
material omissions and scienter through defendants’ public statement denying a submission of
additional data to the FDA.
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