Broker-Dealer Litigation - Greenberg Traurig LLP

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In re Crocs, Inc. Securities Litigation, 774 F. Supp. 2d 1122 (D. Colo. 2011).
Investors brought class against suit against corporation, its auditor, 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 claimed that despite difficulties in demand and an inventory buildup, (i) the CEO
signed the company’s financial reports, (ii) various representations were made relating to rapid
growth and distribution, and (iii) the auditor’s participated in verifying such financial statements.
These actions, when taken into consideration with the deteriorating demand, effectively misled
investors into thinking the company was strong. The court granted defendants’ motion to
dismiss finding that investors failed to allege material misrepresentations or omissions and failed
to allege scienter on the part of the CEO and the auditor.
Mishkin v. Zynex Inc., 2011 WL 1158715 (D.Colo. Mar. 30, 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 during the class
period, defendants engaged in a systematic scheme to over-bill insurance companies. Plaintiffs
alleged that defendants routinely billed more than they reasonably expected to be paid in order to
inflate revenue numbers. The court denied defendants’ motion to dismiss finding that the
defendants’ statements of optimism could be actionable if defendants were aware of specific
facts that undermined the basis for their statements, and that the totality of plaintiffs allegations
supported a strong inference of scienter.
Simmons Investments, Inc. v. Conversational Computing Corporation, 2011 WL 673759 (D.
Kan. Feb. 17, 2011).
Plaintiff 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. Plaintiff alleged that defendants made a series of material
misrepresentations and omissions of material facts in order to get plaintiff to first invest in
convertible notes and then to extend the maturity date on the notes. The court denied defendants’
motions to dismiss finding that plaintiff’s allegations pled the alleged misstatements with the
requisite particularity.
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