Broker-Dealer Litigation - Greenberg Traurig LLP

that statutes of repose are not susceptible to equitable tolling, does not apply here. In furtherance
of the policies of economy and efficiency that underpin American Pipe, its tolling principles
were also deemed to apply here because the original plaintiffs lacked standing. The court also
held that diminution in value of a security was sufficient to plead cognizable injury under the
Securities Act, and that allegations concerning systematic disregard for underwriting and
appraisal standards, or an effort to maximize loan origination without regard to loan quality,
were actionable. The court dismissed the Section 11 claims to the extent they were based upon
alleged misrepresentations concerning the derivation or integrity of the ratings, because plaintiffs
had pleaded no duty to disclose any alleged flaws in the ratings process.
In re Sec. Capital Assur. Ltd. Sec. Litig., 2011 WL 4444206 (S.D.N.Y. Sept. 23, 2011).
The district court granted defendants’ motions to dismiss in their entirety, dismissed the
first amended consolidated class action complaint with prejudice, and denied as futile plaintiffs’
request for leave to amend the complaint, which alleged violation of, inter alia, Section 11 of the
Securities Act of 1933 arising from exposure to subprime loans. The court dismissed the Section
11 claim because the absence of loss causation was apparent on the face of the complaint, which
did not sufficiently identify corrective disclosures that revealed any allegedly concealed facts.
Because the “essence” of loss causation is that an alleged misstatement or omission concealed
material information from the market that, when disclosed, negatively affected the value of the
security, it is “essential” that plaintiffs allege concealed facts that were subsequently revealed.
Having failed to do so, the absence of loss causation was apparent on the face of the complaint
and therefore subject to dismissal.
City of Roseville Employees’ Ret. Sys. v. EnergySolutions, Inc., 2011 WL 4527328 (S.D.N.Y.
Sept. 30, 2011).
The district court granted in part and denied in part defendants’ motion to dismiss a
second amended class action complaint, which alleged violation of, inter alia, Section 11 of the
Securities Act of 1933 in connection with an initial public offering and a subsequent offering.
The court sustained the Section 11 claim to the extent it was based upon statements that were
false or that omitted facts necessary to make the disclosures not materially misleading. The court
dismissed the Section 11 claim as not plausible under Ashcroft v. Iqbal, 129 S.Ct. 1937 (2009),
and Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), to the extent it was based upon
documents that refuted plaintiffs’ allegations. The court also dismissed the Section 11 claim to
the extent it was based upon an alleged failure to make disclosures under Item 303 of Regulation
S-K, which requires disclosure of known trends or uncertainties, because the information alleged
to be in violation of Item 303 either did not reflect trends or uncertainties, or was sufficiently
disclosed.
B.1
B.1
15