Broker-Dealer Litigation - Greenberg Traurig LLP

partnership and worked to obtain investors moved to dismiss the suit. In arguing for dismissal of
the Section 12(a)(1) claim, the movants claimed plaintiffs had not plead with particularity that
movants were “sellers” of the securities because movants had sold their interest in the
partnership. The court found plaintiffs had alleged sufficient facts to find that movants’ actions
may have served their own financial interests. The court granted the motion to dismiss as to two
of the movants on the Section 12(a)(2) claims. The court noted because the claim sounds in
fraud, plaintiffs’ allegations must meet Rule 9 pleading requirements. The court held that
plaintiffs had failed to plead particularized facts showing that two of the movants made
fraudulent misrepresentations to investors, or that movants had the requisite scienter. In
rejecting defendants’ motion to dismiss the Section 12(a)(2) claim as to the third movant, the
court held that plaintiffs had met the misrepresentation and scienter requirements of Rule 9 by
pleading that the movant had misled plaintiffs by implying that the partnership was registered
when it was not.
Billitteri v. Sec. Am, Inc., 2011 WL 3586217 (N.D. Tex. Aug 4, 2011).
The court approved a settlement agreement for claims including violations of Section
12(a) of the Securities Act of 1933 because the settlement provided a fair and reasonable
recovery for class members and met all Rule 23 requirements. After investing in two Ponzi
schemes, the plaintiffs in two class actions brought suit against several defendants alleging
several violations of federal and state securities laws, including violation of Section 12(a). After
arbitration and mediation, the parties proposed a settlement agreement that disposed of the
Section 12 claims against all the defendants, which the court found fair and reasonable for all
class members.
Nexbank, SSB v. BAC Home Loan Servicing, LP, 2011 WL 5182118 (N.D. Tex. Oct. 28, 2011).
The court granted plaintiff’s second motion to remand the suit to state court. Plaintiff
asserted various common law and statutory state law claims, as well as federal securities claims
under Section 12(a)(2) of the Securities Act of 1933 based on alleged misconduct by the
defendants related to three mortgage-backed securities. Defendants removed the suit to federal
court. The court remanded the case, rejecting defendants’ argument that the Section 12 claim
was baseless and holding that the claims were not removable. In the state court, defendants filed
a motion for summary judgment in which they raised for the first time the argument that
plaintiff’s Section 12 claim failed because the securities at issue were acquired after the ninetyday
maximum window closed for delivery of a prospectus, and the certificates purchased by
plaintiff did not require delivery of a prospectus. This state court granted the motion, and the
defendants again removed the case to federal court. Because defendants could have but did not
raise the “new” improper or fraudulent pleading ground when they removed the first time, the
court held that it could not serve as a basis for the defendants’ second removal. Further, the state
court’s dismissal of the Section 12 claim did not constitute a finding that the claim was
improperly or fraudulently pleaded, as there was no such conclusion in the order.
B.2
B.2
39