Broker-Dealer Litigation - Greenberg Traurig LLP

Waterford Twp. Police & Fire Ret. Sys. v. Smithtown Bancorp, Inc., 2011 WL 3511057
(E.D.N.Y. May 31, 2011).
After consolidating two related putative securities fraud class actions, the district court
considered an unopposed joint motion filed by an individual investor and a retirement system to
be appointed co-lead plaintiffs. Since their motion was unopposed, the court appointed them colead
plaintiffs after finding that they satisfied the requirements of Fed. R. Civ. P. 23. The court
also approved their selection of lead counsel.
Bensley v. FalconStor Software, Inc., 2011 WL 3849541 (E.D.N.Y. Aug. 29, 2011).
In a putative securities fraud class action, the court considered two competing motions for
appointment as lead plaintiff filed by an individual investor and Rochester Laborers Pension
Fund (the “Fund”). Although the Fund had suffered the greatest losses on the securities at issue
during the class period, the court found that it was subject to unique defenses because it had sold
all of its shares months before disclosure of the alleged fraud. While the Fund argued that it had
sold its shares after a partial disclosure, the court found that the alleged partial disclosure did not
reveal the fraudulent conduct at issue. Thus, the court found that the Fund was a “total in-andout
trader,” may be unable to demonstrate loss causation, and, thus, was not an adequate lead
plaintiff. Accordingly, after finding that individual investor satisfied the requirements of Fed. R.
Civ. P. 23, the court appointed him as lead plaintiff and approved his choice of counsel.
Prime Mover Capital Partners L.P. v. Elixir Gaming Tech., Inc., 793 F. Supp. 2d 651 (S.D.N.Y.
2011).
In a securities fraud action brought by several hedge funds, the district court granted in
part defendants’ motion to dismiss claims relating to allegedly false and misleading statements
concerning the defendant casino’s business prospects. Defendants argued that certain statements
concerning the expected “average net win rate per machine” were forward-looking statements
entitled to protection under the Private Securities Litigation Reform Act of 1995’s safe harbor.
The court held such statements were shielded from liability because they were forward-looking
and plaintiffs had failed to adequately allege that defendants had actual knowledge of the falsity
of such statements. Accordingly, the court granted defendants’ motion to dismiss the securities
fraud claims.
Foley v. Transocean Ltd., 272 F.R.D. 126 (S.D.N.Y. 2011).
In a putative securities fraud action, the court considered three competing motions for
appointment as lead plaintiff filed by an institutional investor, a foreign pension fund, and a
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