Broker-Dealer Litigation - Greenberg Traurig LLP

dismiss finding that plaintiff’s allegations sufficiently alleged that defendants substantially
participated in the alleged misstatements, that plaintiffs sufficiently alleged reliance, that
allegations gave rise to strong inference of scienter, and plaintiff’s allegations were sufficient to
plead loss causation.
Louisiana Municipal Police Employees Retirement System v. KPMG LLP, 2011 WL 4629299
(N.D. Ohio Sept. 30, 2011).
Investor filed putative private securities fraud class action alleging that company, its
officers, and its outside auditor participated in fraudulent scheme and wrongful course of
business that caused company to falsify its financial records by improperly recognizing revenue
and manipulating its recording of expenses. Defendants moved to dismiss for failure to
adequately plead scienter against corporate officers and outside auditor and failure to adequately
plead loss causation against all defendants. The court denied the motion, holding that investors
adequately pleaded scienter against corporate officers and outside auditor and that they had also
adequately pleaded loss causation.
Int’l Brotherhood of Electrical Workers v. Limited Brands, Inc., 788 F. Supp. 2d 609 (S.D.Ohio
2011).
Investors brought class action suit against corporation and its executives alleging
violations of federal securities laws and defendants filed a motion to dismiss for failure to state a
claim as required under the heightened pleading standards of the PSLRA. Plaintiffs alleged that
corporation’s executives made false or misleading statements to conceal reckless behavior. The
court granted defendants’ motion to dismiss finding that investors’ claims that corporation
participated in nefarious scheme by high-level executives to conceal problems within company,
failed to sufficiently allege scienter; that investors’ claims that corporation’s executives would
receive larger bonuses if stock price was inflated was insufficient motive to satisfy scienter
requirement; that allegations of executives knowing but failing to disclose that its interactive
software system was “doomed to fail” failed to adequately allege scienter given company’s $18
million investment in system start-up, that many of the other corporate statements were either not
false, not material, merely puffery or could not be directly attributed to any executive.
Garden City Employees’ Retirement System v. Psychiatric Solutions, Inc., 2011 WL 1335803
(M.D.Tenn. Mar. 31, 2011).
Plaintiffs brought class action suit against defendants alleging violations of federal
securities laws and 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
engaged in and/or materially assisted in a scheme and course of business to artificially inflate the
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