Broker-Dealer Litigation - Greenberg Traurig LLP

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In re St. Jude Med., Inc. Sec. Litig., 2011 WL 6755008 (D. Minn. Dec. 23, 2011).
Plaintiff brought suit against defendants alleging violations of Section 10(g) and Rule
10b-5 of the Securities Exchange Act of 1934. Defendant filed a motion to dismiss claiming that
allegations of complaint fail to satisfy the heightened pleading requirements of the PSLRA with
respect to the identification of false or misleading statements and the requisite state of mind, as
well as other legal requirements for pleading securities fraud claims, particularly with respect to
loss causation. The court granted the motion in part and denied it in part, finding that the
allegations of the complaint relating to undisclosed sales and channel stuffing practices directly
related to representations of the company’s healthy economic status were sufficiently
particularized and that such practices could by the officers do support a strong inference of
scienter as well as loss causation.
Teamsters Local 617 Pension and Welfare Funds v. Apollo Group, Inc., 2011 WL 1253250
(D.Ariz. Mar. 31, 2011).
Plaintiffs 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 claimed various fraudulent activities relating to
improper backdating of options and misleading statements made in conjunction with such
practices. The court granted defendants’ motion to dismiss finding a lack of circumstances
contributing to a strong inference of scienter relating to certain claimed misstatements. The
court also found that plaintiff failed to plead falsity with requisite particularity.
In re Apollo Group, Inc. Securities Litigation, 2011 WL 5101787 (D.Ariz. Oct. 27, 2011).
Plaintiffs brought suit against a company that owns and operates proprietary
postsecondary education institutions and several of its officers alleging violations of Section
10(b) and Rule 10b-5 of the Securities Exchange Act of 1934. Plaintiffs claimed that defendants
made false and misleading statements and omissions of material fact regarding the company’s
financial condition, business focus, ethics, compensation and recruitment practices, and
compliance with applicable laws. These statements and omissions resulted in an artificial
inflation of the company’s stock and led plaintiffs to purchase stock at inflated prices.
Defendants filed a motion to dismiss for failure to meet the heightened pleading requirements
under the PSLRA. The court granted the defendants’ motion with leave for the plaintiffs to
amend, finding that plaintiffs did not adequately plead a strong inference of scienter and loss
causation. The court held that Plaintiffs allegations, which were based on the defendants’ trading
activities, the testimony of mostly low-level confidential witnesses and the failure of defendants
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