Broker-Dealer Litigation - Greenberg Traurig LLP

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Brecher v. Citigroup, Inc., 797 F. Supp. 2d 354 (S.D.N.Y. 2011).
Employees who participated in an employer’s stock purchase program brought action
against employer, members of its board of directors, and board’s committee which administered
the program, for alleged violations of federal securities laws. Defendants moved to dismiss for
failure to state a claim as required under the heightened pleading standard of the PSLRA.
Plaintiffs claimed that defendants failed to disclose the stock purchase program’s subprime
mortgage exposure. The court granted defendants’ motion to dismiss finding that the employees
failed to allege scienter through declarations concerning corporation’s overall business outlook.
The court found these to be announcements of corporate optimism and not actionable as
fraudulent misstatements.
In re Lehman Brothers Securities and Erisa Litigation, 799 F. Supp. 2d 258 (S.D.N.Y. July 27,
2011).
Investors brought class action suit against a financial services corporation and its former
officers, directors, auditors, and underwriters, for 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 made materially false and
misleading statements and omissions regarding corporation’s liquidity risk and value of real
estate holdings. The court granted defendants’ motion to dismiss in part and denied in part
holding that plaintiffs sufficiently alleged material misrepresentations, scienter and loss
causation by its former officers. The court found, however, that plaintiffs failed to allege
material misrepresentations by auditor.
In re Manulife Financial Corporation Securities Litigation, 276 F.R.D. 87 (S.D.N.Y. 2011).
Investors brought a class action suit against a financial services corporation and its
former officers, for alleged violations of federal securities laws. Defendants moved to dismiss
for failure to state a claim as required under the heightened pleading standard of the PSLRA.
Specifically, plaintiffs alleged that defendants made material misrepresentations and omissions
concerning the corporation’s risk management activities. The court granted defendants’ motion
to dismiss finding that investors failed to allege a material misrepresentation, scienter and loss
causation.
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