Broker-Dealer Litigation - Greenberg Traurig LLP

granted the defendants’ motion to dismiss finding that plaintiff failed to adequately allege
scienter and that the disclosures in the complaint, equated to a much more likely showing of nonculpable
attempts to remedy internal business difficulties while keeping the market informed to
the extent practicable.
Oughtred v. E*Trade Financial Corporation, 2011 WL 1210198 (S.D.N.Y. Mar. 31, 2011).
Plaintiffs brought a class action suit against defendants 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 alleged that defendants defrauded
purchasers of auction rate securities by making misrepresentations and omissions of material fact
about the risks, value and liquidity of those securities. The court granted defendants’ motion to
dismiss finding that plaintiffs did not properly plead scienter by failing to show a motive,
opportunity, and circumstantial evidence of conscious misbehavior or recklessness of defendants.
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Tiberius Capital, LLC v. Petrosearch Energy Corporation, 2011 WL 1334839 (S.D.N.Y. Mar.
31, 2011).
Plaintiffs brought 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. Plaintiff claimed that defendant made material misstatements
stating that plaintiff was not entitled to dissenter’s rights as a shareholder prior to a merger. The
court noted that defendant subsequently admitted it had been mistaken and plaintiff was in fact
entitled to those rights. However, the court granted defendants’ motion to dismiss finding that
although plaintiff did sufficiently particularize the relevant misstatement, scienter was not
sufficiently pleaded in relation as plaintiff failed to show that any contradictory information was
in the possession or knowledge of defendants. The court also noted that plaintiff failed to
adequately plead economic loss or loss causation through a lack of evidence of a mispriced
merger.
Egan v. Tradingscreen, Inc., 2011 WL 1672066 (S.D.N.Y. May 4, 2011).
Plaintiff brought suit against his employer for alleged violations of federal securities
laws. Defendant moved to dismiss for failure to state a claim as required under the heightened
pleading standard of the PSLRA. Plaintiff alleged that he was induced by defendant to invest in
the offering of certain stock options and grants. Plaintiff claimed that defendant concealed
certain underlying misconduct that affected the price of the options and stock. Plaintiff also
claimed that defendant misrepresented the payout policy and failed to allow him to exercise
rights in relation to them that he was promised. The court granted defendant’s motion to dismiss
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