Broker-Dealer Litigation - Greenberg Traurig LLP

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In re Sanofi-Aventis Sec. Litig., 774 F. Supp. 2d 549 (S.D.N.Y. 2011).
Investors asserted claims against a major pharmaceutical company and certain related
individuals for violations of Section 10(b) of the Securities Exchange Act of 1934, and
Rule 10b-5 thereunder, and for control party liability pursuant to Section 20(a) of the Exchange
Act, all relating to statements concerning the production of a developing drug. Defendants filed
a motion to dismiss on all counts. The court denied defendants’ motion to dismiss the securities
fraud claims, but dismissed control person liability claims against all but two individual
defendants. The court found that two of the individual defendants were decision-making
officials who had made allegedly fraudulent statements about the drug. The court found that
each also had knowledge of, or access to, the omitted facts that allegedly rendered his statements
misleading and thus, for purposes of the pleading stage, engaged in conduct that would constitute
recklessness. The court found that the plaintiffs’ factual allegations with respect to the
remaining defendants, however, were insufficient to survive a motion to dismiss. The court
noted that none of those individual defendants were alleged to have made statements that
constituted actionable omissions. Plaintiffs failed to allege any particularized facts indicating
that those defendants had “actual control” over the statements that were made or otherwise
played some discernable role in the making of those statements. The court held that merely
generally alleging persons were decision-making officials or had access to material information
was inadequate circumstantial evidence that did not indicate involvement in perpetrating the
fraud. Thus, the plaintiffs failed to establish culpable participation as to any of those individual
defendants. The motion to dismiss as to those defendants was granted.
In re Tronox, Inc. Sec. Litig., 769 F. Supp. 2d 202 (S.D.N.Y. 2011).
Plaintiffs brought a class action alleging that a corporation and its fiduciaries made false
and misleading statements during and following an initial public offering and asserted claims
under Section 10(b) and Section 20(a) of the Securities Exchange Act of 1934. Defendants
moved to dismiss the claims. The court held that the plaintiffs properly alleged that the
corporation was liable as a controlling person under Section 20(a) because the allegations
supported the plausible inference that the corporation controlled the dissemination of the
statements in the Securities and Exchange Commission filings that were materially false and
misleading. Additionally, the plaintiffs made a successful showing that certain defendants had
the power to direct or cause the direction of the management and policies of the corporation.
Thus, the motion to dismiss as to those defendants was denied. In addition, the court found that
the plaintiffs properly alleged that the successor-in-interest to the corporation was also liable as a
controlling person.
Wachovia Equity Sec. Litig. v. Wachovia Corp., 753 F. Supp. 2d 326 (S.D.N.Y. 2011).
Plaintiffs brought claims, under the Securities Act of 1933 and the Securities Exchange
Act of 1934, against defendant and a variety of related entities and individuals. Defendants
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