Broker-Dealer Litigation - Greenberg Traurig LLP

to judgment as a matter of law because the evidence at trial failed to establish that the defendant
made false or misleading statements to the public with the requisite scienter and that he was a
control person with respect to plaintiffs’ claim under Section 20(a). The court found that
sufficient evidence was presented at trial to support the jury’s finding regarding defendant’s
control person liability under Section 20(a). Specifically, the court found that the plaintiffs
presented testimony at trial regarding defendant’s power to direct or cause the direction of
management, as well as his power to direct or cause the direction of the policies of persons that
prepared the relevant financial statements at issue. Thus, the court denied defendant’s motion for
judgment as a matter of law.
In re Toyota Motor Corp. Securities Litigation, 2011 WL 2675395 (C.D. Cal. July 7, 2011).
Plaintiff shareholders brought suit against a corporation and its officers for material
misrepresentations regarding the quality and safety of its products in violation of Section 10(b)
and Section 20(a) of the Securities Exchange Act of 1934. Defendants moved to dismiss. After
finding that there were violations of Section 10(b), the court found that the complaint failed to
plead facts that sufficiently established that the individual defendants had actual control or power
over the individuals who made the misrepresentations. As such, the Section 20(a) claims were
dismissed.
Stichting Pensioenfonds ABP v. Countrywide Fin. Corp., 80 F. Supp.2d 1125 (C.D. Cal. 2011).
Plaintiff sued a corporation, its affiliates, and certain individuals based on Sections 11,
12(a)(2), and 15 of the Securities Act of 1933, and Sections 10(b) and 20(a) of the Securities
Exchange Act of 1934. Defendants moved to dismiss on multiple grounds. The court found that
because Section 13 of the Securities Act provides a one-year statute of limitations and a threeyear
statute of repose on claims under Sections 11 and 12(a)(2), and because the statute of repose
had run, the claims under Sections 11 and 12(a)(2) must be dismissed. Further, because a claim
under Section 15 for control person liability requires an adequately pled claim under Sections 11
or 12(a)(2), it was dismissed as well. The court found that the Section 10(b) claims were also
precluded either by the statute of repose or the statute of limitations, and because Section 20(a)
control person liability requires a predicate violation, those claims were dismissed as well.
Nguyen v. Radient Pharms. Corp., 2011 U.S. Dist. LEXIS 124631 (C.D. Cal. Oct. 26, 2011).
Plaintiffs brought a federal securities class action against a pharmaceutical corporation
and its officers on behalf of all persons and entities who purchased the common stock of
defendant during a particular time period. Plaintiffs argued that defendants issued a materially
false and misleading press release stating that the corporation had combined with a prestigious
medical organization to conduct a clinical trial together. Plaintiffs alleged that the individual
defendants acted as “control persons” of the corporation within the meaning of Section 20(a) of
the Securities Exchange Act of 1934. Plaintiffs alleged that the individual defendants:
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