Broker-Dealer Litigation - Greenberg Traurig LLP

plaintiffs alleged that defendants serially misrepresented to investors facts relating to the
existence and likelihood of FDA approval. Defendants moved to dismiss on the grounds that it
failed to meet the heightened pleading requirements under the PSLRA. The court denied the
defendant’s motion and held that the alleged misstatements, taken together, were sufficient to
show a “strong inference” of scienter, that plaintiffs had adequately pled loss causation and that
the statements plaintiffs relied upon were actionable under the PSLRA.
Luciani v. Luciani, 2011 WL 3859707 (S.D. Cal. Sept. 1, 2011).
Plaintiffs brought suit against defendants alleging violations of federal securities laws and
defendant brought a motion to dismiss for failure to state a claim under the heightened pleading
standards required by the PSLRA. Plaintiffs alleged that defendants sought dissolution of a
company that plaintiffs and defendants were investors in with the intention of forcing a
distressed sale of the company. The distressed sale allegedly would benefit defendants in
purchasing the plaintiffs’ membership interests at “low-ball” prices. The court denied
defendants’ motion to dismiss, finding that even though plaintiff failed to specifically identify
which statements contained alleged misrepresentations, the defendants could clearly infer which
statements the plaintiffs alleged contained misrepresentations.
Rich v. Shrader, 2011 WL 4434852 (S.D. Cal. Sept. 22, 2011).
Plaintiff brought suit against defendant alleging violations of federal securities laws and
defendant filed a motion to dismiss for failure to state a claim as required under the heightened
pleading standards of the PSLRA. Plaintiff alleged that defendant violated federal securities laws
by not disclosing, at the time plaintiff retired, that the company had discarded its longstanding
policy to remain one company. Plaintiff further alleged that defendant was planning to sell its
government division to a private equity firm, which would have entitled plaintiff to a greater
profit from selling his shares under the company’s stock plan. The court granted defendants’
motion to dismiss and found that the entirety of plaintiff’s complaint failed to contain sufficient
facts to create a strong inference of scienter and failed to identify any material facts in the
relevant time period that would support allegation that defendant knew of the plan before.
Lifschitz v. Nextwave Wireless Inc., 2011 WL 5839682 (S.D. Cal. Nov. 21, 2011).
Plaintiff brought suit against defendants alleging violations of Section 10(b) and Rule
10b-5 of the Securities Exchange Act of 1935. Plaintiff alleged that numerous statements made
by Defendants were false and misleading relating to defendants’ knowledge of liquidity
problems and acquisition strategy. The court granted the defendants’ motion to dismiss the
plaintiff’s third amended consolidated complaint with prejudice, finding that plaintiff had failed
to plead a Section 10(b) violation because seventeen out of twenty-four misleading statements
D.1
D.1
D.1
169