Broker-Dealer Litigation - Greenberg Traurig LLP

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White v. Kolinsky, 2011 WL 1899307 (D.N.J. May 18, 2011).
Investors brought suit against defendants for alleged violations of federal securities laws
and defendants moved to dismiss for failure to state a claim as required under the heightened
pleading standard of the PSLRA. Plaintiffs alleged that defendants knew of prior costs already
incurred prior to soliciting investment from plaintiffs and failed to disclose those costs as well as
other potential financing hurdles the investment project was experiencing. The court granted
defendants’ motion to dismiss finding that plaintiffs’ allegations rested on inadequately
particularized “group pleading” claims which were not permitted under the PSLRA. The court,
however, denied the other defendants motion to dismiss finding that whether many of the
statements contained in a private offering memorandum were actionable was a question of fact.
In re Merck & Co., Inc. Sec., Derivative, & ERISA Litig., 2011 WL 3444199 (D.N.J. Aug. 8,
2011).
Plaintiffs brought a class action suit against defendant pharmaceutical company for
violations of federal securities laws and defendants filed motion to dismiss for failure to state a
claim as required under the heightened pleading standards of the PSLRA. Plaintiffs alleged that
defendant overstated the commercial viability of one of their drugs or at least recklessly
downplayed the possible link between the drug and cardiovascular complications. Plaintiffs
claimed that the company had strong evidence of heart-attack link with the drug even before the
product launched. Plaintiffs alleged that this evidence continued to increase while company
continued to tout its safety on the market. The court granted defendants’ motion to dismiss with
respect to the alleged misrepresentations of all defendants except for one.
In re Anadigics, Inc., Securities Litigation, 2011 WL 4594845 (D.N.J. Sept. 30, 2011).
Plaintiffs brought suit against defendants alleging violations of federal securities laws and
defendants moved to dismiss for failure to state a claim under the heightened pleading
requirements of the PSLRA. Plaintiffs alleged defendants misled investors about its capability to
meet demand for its products. The court granted defendants’ motion to dismiss holding that the
allegedly false or misleading statements were not actionable because they had not been pleaded
with the requisite particularity as to either falsity or scienter. Specifically, the court found that
statements regarding supply shortages no longer being a concern and demand no longer
outstripped capacity to be pleaded with the requisite particularity. The court held, however, that
plaintiff failed to allege any facts with regard to those statements from which the court could
infer scienter.
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