Broker-Dealer Litigation - Greenberg Traurig LLP

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to correct erroneous accounting procedures, did not adequately support a strong inference of scienter. Further, the court reasoned that the allegations regarding subsequent corrective disclosures did not adequately allege loss causation. Plichta v. Sunpower Corporation, 790 F.Supp.2d 1012 (N.D. Cal. 2011). Shareholders brought class action suit against company 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. Shareholders alleged that defendants unsubstantiated accounting entries rendered the company’s filings with the Securities and Exchange Commission false and misleading. The court granted defendants motion to dismiss finding that the shareholders failed to plead scienter sufficiently. Further, the court found that plaintiffs allegations did not support a strong inference that management could have known that the underlying data entered into the accounting entries were false. Plaintiffs allegations that executives had made acknowledgements and admissions regarding a lapse in internal control mechanisms was not sufficient to survive the motion to dismiss. Lapiner v. Camtek, Ltd., 2011 WL 445849 (N.D. Cal. Feb. 2, 2011). Plaintiffs brought suit against defendants alleging violations of federal securities laws and defendants moved to dismiss for failure to state a claim as required under the heightened pleading requirements of the PSLRA. Plaintiffs were stockholders claiming defendants engaged in a scheme to inflate the price of stock by making material misrepresentations regarding its cash flow and revenue. Allegedly, defendants cashed in letters of credit on orders for products before the orders were accepted. The court granted defendants’ motion to dismiss, finding that plaintiffs did not identify the basis of their belief that the letters of credit were used in this manner. The court also found plaintiffs’ grounds for scienter based on stack sales and positions held in the company to be deficient and an additional ground for dismissal. In re Bank of America Corp. Auction Rate Securities (ARS) Marketing Litigation, 2011 WL 740902 (N.D. Cal. Feb. 24, 2011). Investors brought suit against bank 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 bank earned lucrative fees in connection with its role in a securities market and that it took advantage of the opportunity to manipulate the market. The court granted defendants’ motion to dismiss, finding that plaintiffs failed to sufficiently allege the manipulative acts on which the alleged scheme was based. Further, the court found that the mere allegation that defendants desired to earn a commission was too common a motive and not adequately particularized. D.1 D.1 D.1 160
D.1 Scala v. Citicorp Inc., 2011 WL 900297 (N.D. Cal. Mar. 15, 2011). Plaintiffs brought 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 alleged that defendants solicited individuals with good credit scores to participate in a real estate investment scheme that was misrepresented as having little or no risk. Further, plaintiffs alleged that defendants fraudulently marketed and sold securities relating to the scheme, which violated federal securities laws. The court denied defendants’ motion to dismiss. The court found that plaintiffs had adequately alleged scienter based on defendants’ repeated representations that the investment was a low-risk investment opportunity. Further, plaintiffs adequately alleged loss causation based on defendants potentially fraudulent inducement to enter into the contracts. In re Infineon Technologies AG Securities Litigation, 2011 WL 7121006 (N.D.Cal. Mar. 17, 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 defendants engaged in securities fraud by participating in an illegal price-fixing conspiracy involving a product and then manipulated the price of stock by making misrepresentations about the impact of the artificially inflated product prices on underlying company’s corporate value. The court granted defendants motion to dismiss and gave plaintiffs leave to amend. The court found that plaintiffs failed to adequately particularize any specific misrepresentations and instead relied on a generalized statement that defendants misrepresented inflated product prices during a specific period. In re Verifone Holdings Inc. Securities Litigation, 2011 WL 1045120 (N.D.Cal. Mar. 22, 2011). Plaintiff brought consolidated class action suit against transaction automation company and certain of its officers and directors 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 defendants’ failures to make appropriate accounting corrections resulted in overstated and misreported revenues. This, in turn, caused plaintiffs to purchase defendants’ stock at artificially inflated rates. The court granted defendants’ motion to dismiss finding that none of plaintiffs’ allegations gave rise to a strong inference of scienter but that the stronger inference was mistake or gross negligence by the officer. D.1 D.1 161
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Broker-Dealer Litigation 2011 Annua
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Rocky Pozza Miller, Canfield, Paddo
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3. Safe Harbor/Bespeaks Caution Def
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(iii) Falsification of Documents...
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SECURITIES LITIGATION A. Definition
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Purvis v. Arizona Corp. Comm’n, N
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allegation of fraud. The complaint
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Silverstrand Investments v. AMAG Ph
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complaint lacked named plaintiffs w
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egarding loan-to-value ratios repor
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appraisers’ alleged acceptance of
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that statutes of repose are not sus
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Pension Trust Fund for Operating En
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Securities Exchange Act of 1934. Th
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authorities versus those reported i
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In re Oppenheimer Rochester Funds G
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claims as to the appraisal standard
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under Section 12 and declined to ex
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however, the court found that the s
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that a mutual fund’s share price
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allege a material misrepresentation
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over common questions, given the nu
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lending practices; and its solvenci
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partnership and worked to obtain in
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Section 12(a)(2) required the court
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initially inflated the company’s
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B.2 Self v. Chase Bank, N.A., 2011
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“associated with,” or “acted
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Gibbons v. Nat’l Real Estate Inve
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avoid ambiguous, potentially mislea
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B.3 SEC v. Kelly, 2011 WL 44331161
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B.3 SEC v. Woodruff, 778 F. Supp. 2
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C. Liabilities under the Securities
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easonable juror could conclude that
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Claimants requested compensatory da
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C.1.d Ashland Inc. v. Morgan Stanle
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C.1.d AnchorBank, FSB v. Hofer, 649
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experiencing large operating losses
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C.1.d Resnik v. Woertz, 744 F. Supp
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substantial likelihood that disclos
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C.1.d In re Evergreen Ultra Short O
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In re Merrill Lynch Auction Rate Se
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fiduciary duty and negligent misrep
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corporation’s earnings forecasts
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C.1.e In re Bank of America Corp. S
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f. Affirmative Defenses Wilson v. M
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that the complaint failed to allege
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immaterial; or (3) made without act
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of the Private Securities Litigatio
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held that the statute of limitation
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C.1.f In re Novatel Wireless Securi
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parent company liable for statement
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C.1.g SEC v. Tecumseh Holdings Corp
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C.1.g Fishman v. Morgan Keegan & Co
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C.2 Litwin v. Oceanfreight, Inc., 2
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Hysong v. Encore Energy Partners LP
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and created an uncertainty that KBR
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consented to the entry of a final j
Page 117 and 118: 3. Section 15(c) C.3 SEC v. Ficeto,
Page 119 and 120: SEC v. Stifel, Nicolaus & Co., Inc.
Page 121 and 122: settled with the SEC prior to the c
Page 123 and 124: equity interests in real estate ass
Page 125 and 126: noted that the SEC had “merely re
Page 127 and 128: ing such court actions (the “1990
Page 129 and 130: D. Liabilities under the Securities
Page 131 and 132: its’ liquidity problems and plans
Page 133 and 134: few of defendant’s employees were
Page 135 and 136: D.1 Dronsejko v. Thornton, 632 F.3d
Page 137 and 138: In re Smith & Wesson Holding Corp.
Page 139 and 140: particularized as materially mislea
Page 141 and 142: D.1 Stephenson v. Pricewaterhouseco
Page 143 and 144: D.1 Russo v. Bruce, 777 F. Supp. 2d
Page 145 and 146: D.1 Jacquemyns v. Spartan Mullen Et
Page 147 and 148: granted the defendants’ motion to
Page 149 and 150: D.1 Egan v. Tradingscreen, Inc., 20
Page 151 and 152: City of Roseville Employees’ Reti
Page 153 and 154: D.1 Solow v. Citigroup, Inc., 2011
Page 155 and 156: Local 731 I.B. of T. Excavators and
Page 157 and 158: D.1 Love v. Alfacell Corp., 2011 WL
Page 159 and 160: disregarded and resulted in omissio
Page 161 and 162: dismiss finding that plaintiff’s
Page 163 and 164: from a decline of defendant’s sto
Page 165 and 166: plaintiffs failed to (i) create str
Page 167: D.1 In re St. Jude Med., Inc. Sec.
Page 171 and 172: granted defendants’ motion to dis
Page 173 and 174: improperly recognized revenue on sa
Page 175 and 176: D.1 Henning v. Orient Paper, Inc.,
Page 177 and 178: plaintiffs alleged that defendants
Page 179 and 180: in various contracts of the company
Page 181 and 182: D.1 In re Crocs, Inc. Securities Li
Page 183 and 184: Phila. Fin. Mgmt. of S.F., LLC v. D
Page 185 and 186: Waterford Twp. Police & Fire Ret. S
Page 187 and 188: Group met the requirements of Fed.
Page 189 and 190: appointed a lead plaintiff. The cou
Page 191 and 192: IBEW Local 90 Pension Fund v. Deuts
Page 193 and 194: D.2 Vandevelde v. China Natural Gas
Page 195 and 196: typicality.” Accordingly, the cou
Page 197 and 198: D.2 Sparano v. Lief, 2011 WL 830109
Page 199 and 200: argument was irrelevant because the
Page 201 and 202: issue, and therefore qualified for
Page 203 and 204: was not available. Moreover, the co
Page 205 and 206: misstatements were shielded from li
Page 207 and 208: D.3 Hopson v. MetroPCS Commc’ns,
Page 209 and 210: D.3 In re St. Jude Med., Inc. Sec.
Page 211 and 212: D.3 Curry v. Hansen Med., Inc., 201
Page 213 and 214: D.3 In re Coinstar Sec. Litig., 201
Page 215 and 216: Plumbers and Pipefitters Local Unio
Page 217 and 218: E. Backus v. Conn. Cmty. Bank, N.A.
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Securities Litigation Uniform Stand
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willfully ignored numerous red flag
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material facts “relating to” th
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E. Northstar Fin. Advisors, Inc. v.
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precluded or removable under SLUSA.
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circumvent SLUSA, the Court of Appe
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of defendant purchased ARS bonds fr
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2. Consumer Protection and Other St
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F.3 Borsellino v. Putnam, 2011 WL 6
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F.4 Haase v. GunnAllen Fin., Inc.,
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that the complaint failed to allege
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eing directed to return improperly
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H.1 U.S. v. Reyes, 660 F.3d 454 (9t
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to dismiss the complaint pursuant t
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Act of 1934 alleging it made false
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and Rule 10b-5 of the Securities Ex
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exert control over the content of c
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H.2 In re Sanofi-Aventis Sec. Litig
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Camofi Master LDC v. Riptide Worldw
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solvency. The district court held t
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(1) the investment corporations’
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held that, in taking plaintiffs’
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Rule 10b-5 claims were pleaded with
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to judgment as a matter of law beca
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H.2 Rafton v. Rydex Series Funds, 2
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those reasons, the court granted th
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Genesee County Employees Ret. Sys.
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Fernea v. Merrill Lynch, Pierce, Fe
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3. Aiding & Abetting H.3 Janus Capi
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of trades by defendants did not amo
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violation of securities laws. To st
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H.3 Merkin v. Gabriel Capital, L.P.
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allegedly illegal fundraising at de
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to any of the claims except the “
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mere suspicion that the broker-deal
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H.4 U.S. v. Speer, 419 F. App’x 5
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equirements of Federal Rule of Civi
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compliance officer testified as a r
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In re Torrey Pines Sec. Inc., Relea
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In re Torrey Pines Sec. Inc., Relea
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or nationally-recognized statistica
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activity, including activity in the
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timely and complete information upd
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J. RICO J. MLSMK Inv. Co. v. JP Mor
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J. In re Refco Inc. Sec. Litig., 20
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Beaman v. Barth, 2011 Bankr. LEXIS
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General Retirement System of City o
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K. Damages and Other Relief in Priv
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K.2 U.S. v. Gushlak, 2011 WL 315917
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K.2 Elipas v. Jedynak, 2011 WL 1706
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are wanton and reckless when done i
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settlement agreement constituted an
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The court held that the trustee was
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L. Contribution, Indemnification L.
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L. MBIA Ins. Corp. v. Credit Suisse
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warranted under these circumstances
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1933. In opposition to the motions,
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M.1 SEC v. Wyly, 788 F. Supp. 2d 92
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as barred by the statute of repose
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equitable estoppel did not apply as
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support the FINRA arbitration as pr
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N.1 Citibank, N.A. v. Franco, 2011
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ecause it overlapped with and was p
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2. Eligibility/Limitations N.2 Yuan
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the legislature did not intend the
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Plaintiff in fact derived a direct
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arbitrator the right to determine w
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and ordering of all parties into ar
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impeachment upon proof of changed c
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N.4.c Aviles v. Charles Schwab & Co
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S.Ct. 1784 (2010). Prior to Merck,
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market sector downturn rendered the
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defendants had misrepresented the n
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allegations did not reference parti
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were disclosed by the timely filing
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improper attempt to file the Third
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O.3 In re Evergreen Ultra Short Opp
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would primarily focus on establishi
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the power of a sovereign.” It was
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the admission by the investment man
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permit exercise of personal jurisdi
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anyway because the connection to ba
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5. Discovery O.5 Mori v. Saito, 802
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O.5 Davis v. Duncan Energy Partners
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censure, a civil money penalty of $
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anch office, which did not have any
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In re Application of Kaminski, Admi
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prejudgment interest. The payment w
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Specifically, the firm’s procedur
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In re Pagliarini, Admin. Proc.File
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firm settled charges that it violat
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capacities. The NAC cited the fact
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maintain and enforce a system of su
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The hearing panel found respondents
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firm also consented to findings tha
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In re Keybanc Capital Markets, Inc.
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$30,000 civil fine, disgorgement of
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The Commission’s complaint allege
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Commission, a federal district cour
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(ii) Misrepresentation Q.1.c.(ii) I
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Q.1.c(ii) In re Chiaese, Release No
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The Commission censured the Firm. A
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particular, CSIM and CS&Co. markete
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Q.1.e.(i) SEC v. Devlin, Litig. Rel
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clearance trades without being a re
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Q.1.e(ii) In re Huntleigh Sec. Corp
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assisted in the Firm’s creation o
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Q.1.e(iii) In re Schaefer, Release
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and hedge fund accounts, to the det
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f. Failure to Supervise Q.1.f In re
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Firm policy disallowing wires from
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The Commission alleged that Lopez-T
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suspension concerning his complianc
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Commission barred LeBouef from asso
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Direct Edge ECN LLC, doing business
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(ii) Falsification of Documents . N
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unavailable, Gizankis and FINRA agr
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j. Procedural Issues (i) Evidence N
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FINRA Rule 2010 by submitting an an
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R. Broker-Dealer Employment Litigat
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discovery responses was also meritl
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R. Frankel v. McDonough, 2011 WL 50
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must not have ruled on that defense
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FINRA award was entitled to full fa
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Lorbietzki v. Merrill Lynch, Pierce
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failed to show that it was prejudic
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Antelis v. Freeman, 2011 WL 6009609
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Berman v. Morgan Keegan & Co., 2011
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Citigroup Smith Barney v. Henderson
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Department of Enforcement v. Hedge
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FINRA Department of Enforcement v.
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Grecco v. Local.Com Corp., 806 F. S
Page 483 and 484:
IAC/InterActiveCorp v. O’Brien, 2
Page 485 and 486:
In re Cell Therapeutics, Inc. Class
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In re Franklin Bank Corp. Sec. Liti
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In re Kim, Release No. 64862, 2011
Page 491 and 492:
In re Mutascio, Release No. 65351,
Page 493 and 494:
In re Shankar, Release No. 64714, 2
Page 495 and 496:
In re Wash. Mut. Mortgage-Backed Se
Page 497 and 498:
KeyBank, N.A. v. Bingo, Coast Guard
Page 499 and 500:
Marini v. Adamo, 2011 WL 4442710 (E
Page 501 and 502:
McCafferty v. A.G. Edwards & Sons,
Page 503 and 504:
Murray v. Citigroup Global Mkts., I
Page 505 and 506:
Picard v. Madoff (In re Bernard L.
Page 507 and 508:
Rafton v. Rydex Series Funds, 2011
Page 509 and 510:
SEC v. Aragon Capital Advisors, LLC
Page 511 and 512:
SEC v. N. Am. Clearing, Inc., Litig
Page 513 and 514:
Solow v. Citigroup, Inc. , 2011 WL
Page 515 and 516:
U.S. Bank N.A. v. Cold Spring Grani
Page 517:
West Va. Laborers Trust Fund v. STE
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