Broker-Dealer Litigation - Greenberg Traurig LLP

NECA-IBEW Pension Trust Fund v. Bank of Am. Corp., 2011 WL 6844456 (S.D.N.Y. Dec. 29,
2011).
The plaintiff sought to partially lift the discovery stay imposed by the Private Securities
Litigation Reform Act of 1995. The court found that there was no serious claim that discovery
was needed to preserve evidence, as the documents in issue had already been produced to the
SEC. The court also concluded that the plaintiff’s vague argument that it needed discovery to
plan litigation strategy and investigate the merits of early settlement discussions was insufficient
to meet the undue prejudice standard necessary to lift the stay. Finally, the court found that, even
if it was true (as the plaintiff contended) that the discovery sought was limited, had already been
produced in another action, and posed no substantial burden to the defendant, these
circumstances were insufficient to overcome the command of the PSLRA.
Botton v. Ness Techs., Inc., 2011 WL 3438705 (D.N.J. Aug. 4, 2011).
Plaintiff alleging violations of the Securities Exchange Act of 1934 in connection with a
proposed merger contemplated by the defendants sought expedited discovery to support its
anticipated filing of a motion to preliminarily enjoin the merger. The court denied the motion,
finding unpersuasive the plaintiff’s claims that without discovery the shareholders would be
forced to vote on the merger without adequate information. The court also found the plaintiff’s
discovery requests overbroad, and noted that other legal remedies existed for the plaintiff to
pursue if the merger was approved by the shareholders.
In re Massey Energy Co. Sec. Litig., 2011 WL 4528509 (S.D. W. Va. Sept. 28, 2011).
In securities litigation brought in the wake of an explosion that killed 29 coal miners, the
plaintiffs moved to partially lift the Private Securities Litigation Reform Act of 1995-imposed
discovery stay. After the United States moved to intervene and stay discovery to prevent
interference with its investigation and prosecution, the plaintiffs and the United States reached
agreement on a proposed order granting the plaintiffs’ discovery motion. Analyzing the
proposed order in light of the defendants’ opposition, the court concluded that the plaintiffs’
requests were sufficiently particularized, that the acquisition of the defendant by another
company demonstrated extraordinary circumstances that might lead to the inadvertent
destruction of documents, and that refusing the requests risked undue prejudice to the plaintiffs.
Accordingly, the court granted the plaintiffs’ motion and entered the proposed order.
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