Broker-Dealer Litigation - Greenberg Traurig LLP

Silverstrand Investments v. AMAG Pharm., Inc., 2011 WL 3566990 (D.Mass. Aug. 11, 2011).
The district court granted defendants’ motions to dismiss a putative federal securities
class action alleging violation of, inter alia, Section 11 of the Securities Act of 1933 in
connection with a securities offering for a pharmaceutical drug used to treat anemia. The Section
11 claim was dismissed in its entirety and as to all defendants. The court held that defendants
did not have a disclosure obligation under Item 303 of Regulation S-K because twenty-three
serious adverse events (“SAEs”) from use of the drug was not a “known trend or uncertainty”
requiring disclosure given the “repeated” disclosures in offering documents and other public
filings that SAEs were observed during clinical trials. The 23 SAEs that occurred after launch of
the drug but prior to the offering were therefore consistent with previously and publicly disclosed
information. Although one person allegedly died from the drug, the court held that a single death
does not constitute a “trend”. The court similarly held that defendants did not have a disclosure
obligation under Item 503 of Regulation S-K, which requires discussion of risk factors, because
they had satisfied that obligation. The court rejected plaintiffs’ argument that the offering
documents omitted material information from (i) action letters from the FDA that twice declined
to approve the drug (rejected because the drug was ultimately approved, suggesting that prior
issues had been resolved), and (ii) an FDA warning letter regarding certain “illegal and
misleading marketing practices (because the complaint failed to establish any connection
between the warning letter and the time of the offering).
Massachusetts Bricklayers & Mason Funds v. Deutsche Alt-A Sec., 273 F.R.D. 363 (E.D.N.Y.
2011).
In a class action alleging violation of, inter alia, Section 11 of the Securities Act of 1933
due to allegedly false and misleading disclosures about mortgage-backed securities, the district
court denied a motion to intervene as of right where the proposed intervenor sought to represent
a class of plaintiffs whose claims had been dismissed for lack of standing by the named
plaintiffs. The court denied the intervenor’s motion as time-barred, finding that the equitable
tolling principles of American Pipe & Construction Co. v. Utah, 414 U.S. 538 (1974), could not
apply where the intervenor had not purchased its securities during the time period identified in
the originally defined class. As a non-class member, the intervenor also failed to satisfy the
intervention requirement of Federal Rule of Civil Procedure 24 that an intervenor have an
“interest relating to the property or transaction” that is the subject of the complaint.
Plumbers’ & Pipefitters’ Local No. 562 Supplemental Plan & Trust v. J.P. Morgan Acceptance
Corp. I, 2011 WL 6182090 (E.D.N.Y. Dec. 13, 2011).
The district court granted in part and denied in part defendants’ motion to dismiss a
putative class action complaint which alleged violation of, inter alia, Section 11 of the Securities
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