Broker-Dealer Litigation - Greenberg Traurig LLP

under Section 12 and declined to extend the fundamental change doctrine (or forced seller
doctrine) to claims brought under the 1933 Act.
Hudes v. Aetna Life Ins. Co., 2011 WL 3805679 (D.D.C. Aug. 30, 2011).
The court dismissed plaintiff’s Sarbanes-Oxley claims because the alleged violating
entity had no securities registered under Section 12 of the Securities Exchange Act of 1933. The
court held securities issued by the World Bank are explicitly “deemed to be exempted securities”
under Section 12.
In re Evergreen Ultra Short Opportunities Fund Sec. Litig., 275 F.R.D. 382 (D. Mass. 2011)
The court granted plaintiffs’ motion to certify a class for its claims arising under Section
12(a) of the Securities Act of 1933 against a mutual fund and persons and entities associated with
the fund. Plaintiffs alleged that defendants violated Section 12 by making false and misleading
statements in offering documents for a fund comprised of high-risk securities. Plaintiffs moved
for certification of a class comprising all persons who purchased shares of the defendant fund
during the proposed class period and who were damaged as a result. The court rejected
defendants’ arguments against certification, holding that it was immaterial that none of the lead
plaintiffs purchased the securities during the first fifteen months of the proposed class period,
that the potential conflicts between the lead plaintiffs and absent putative class members who
benefited from the misinformation did not render the lead plaintiffs inadequate representatives,
and that the lead plaintiffs’ acquisition of interests in the defendant fund through a merger with
the defendant fund and another fund did not render their claims atypical.
Hill v. State Street Corp., No. 09cv12146–NG, 2011 WL 3420439 (D. Mass. Aug 3, 2011).
The court denied defendants’ motion to dismiss plaintiffs’ claims under Section 12(a)(2)
of the Securities Act of 1933 because plaintiffs had stated a valid prima facie claim. Plaintiffs
alleged that the defendant violated Section 12(a)(2) by conducting an offering pursuant to a
registration statement and prospectus that contained untrue and misleading statements of material
fact. Defendant moved to dismiss, claiming that the complaint did not allege sufficient facts to
show that plaintiffs had standing to bring a Section 12 claim. The court denied the motion. It
held that plaintiffs’ assertion that “during the class period, plaintiffs purchased stock in the
defendant pursuant and/or traceable to the offering and suffered substantial damages as a result
of the violations of the securities laws alleged herein.” combined with the lead plaintiff’s
inclusion of a certification showing all of its purchases with a particular defendant satisfied the
Section 12 pleading requirement—even though plaintiffs had not completely identified the
circumstances and sellers in all of the transactions.
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