Broker-Dealer Litigation - Greenberg Traurig LLP

were forward-looking statements protected by the PSLRA’s “Safe Harbor” Provision. Further,
the remaining seven allegedly misleading statements failed to indicate scienter. Such failure was
based, in part, on plaintiff’s failure to show specific facts relating to its confidential witness’s
position in the company and access to company records to show actual knowledge or deliberate
recklessness in not knowing that the statements were false.
In re Novatel Wireless Securities Litigation, 2011 WL 5873113 (S.D.Cal. Nov. 23, 2011).
Shareholders brought securities fraud class action against corporation and its officers,
alleging that defendants engaged in fraudulent scheme to inflate corporation’s stock value.
Defendants moved for judgment on the pleadings and summary judgment. The court found that
genuine issues of material fact precluded summary judgment on the grounds of scienter or
materiality. Further, a question of fact existed related to the securities fraud claim based on the
misrepresentation that the superiority of the corporation’s products would enable it to outperform
the competition. The court also found that genuine questions of material fact precluded judgment
on the pleadings regarding allegations that the corporation misrepresented its true financial
condition because defendants failed to disclose a customer’s plan to stop ordering corporation’s
product.
City of Marysville General Employees Retirement System v. Nighthawk Radiology Holdings,
Inc., 2011 WL 4584778 (D. Idaho Sept. 12, 2011).
Plaintiff brought suit against defendant alleging violations of federal securities laws and
defendant moved to dismiss for failure to state a claim as required under the heightened pleading
standards of the PSLRA. Plaintiff alleged that defendants misled investors with respect to
defendant company’s purchase of certain businesses pursuant to an expansion plan and the
disastrous effects those acquisitions had upon the company’s services. Specifically, plaintiff
asserted that defendants misrepresented the success of their acquisitions, falsely assured
investors that legacy customers were continuing with the company, and issued false earnings
guidance statements for 2007 and 2008. The court granted the motion to dismiss finding that the
complaint failed to state particularized facts that, taken as a whole, raised a strong inference of
scienter rather than simple over-optimism.
RS-ANB Fund, LP, v. KMS SPE LLC, 2011 WL 5352433 (D. Idaho Nov. 7, 2011).
Plaintiff brought suit against an investment company alleging violations of Section 12(b)
and Rule 12b-5 of the Securities Exchange Act of 1934 and defendant filed motion to dismiss for
failure to state a claim. Plaintiff alleged that defendant made fraudulent misrepresentations or
omissions when soliciting investment from plaintiff by failing to disclose that the individual
owner of the company was insolvent at that time. The insolvency allegedly activated provisions
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