Broker-Dealer Litigation - Greenberg Traurig LLP

Stichting Pensioenfonds ABP v. Countrywide Fin. Corp., 802 F. Supp.2d 1125 (C.D. Cal. 2011).
The court granted defendants’ motion to dismiss plaintiff’s claims arising under Section
12(a) of the Securities Act of 1933 because plaintiff’s claims were barred by the three-year
statute of repose. The investor in residential mortgage-backed securities brought suit in
California state court alleging various federal and state law claims. Defendants removed the case
to federal district court and then moved to dismiss. The court dismissed the Section 12 claims
ruling that the claims were barred by the applicable three-year statute of repose since all of the
securities in the complaint were purchased more than three years prior to the filing of the
complaint. The court held plaintiff failed to plead tolling by merely asserting that the securities
in question were tolled by a prior class-action suit without showing that plaintiffs in the prior
class action suit actually purchased the same securities that formed the basis of the current
litigation. The court granted plaintiff leave to amend the complaint but required plaintiff to show
tolling with particularity.
Katz v. China Century Dragon Media, Inc., 2011 WL 6047093 (C.D. Cal. Nov. 30, 2011).
The district court granted defendants’ 12(b)(6) motion to dismiss plaintiff’s securities
claims brought under Section 12(a)(2) of the Securities Act of 1933 for failure to plead fraud
with adequate specificity and granted plaintiff leave to amend its complaint. Plaintiff filed a
lawsuit against defendant alleging a violation of Section 12 for falsely stating earnings in its
registration statement and prospectus because the numbers filed with the SEC were different
from the numbers filed with the Chinese regulatory agency. Defendants moved to dismiss. The
court held that plaintiff alleged fraud and that the complaint lacked the specificity required for
fraud pleadings and that the rules require more than merely alleging that the numbers were not
the same in the two filings.
Bowler v. Green Tree Servicing, LLC, 2011 WL 320398 (E.D. Cal. Jan. 28, 2011).
The magistrate judge recommended that the district court grant defendants’ motion to
dismiss plaintiffs’ claim under Section 12(a) of the Securities Exchange Act of 1933. The pro se
plaintiffs alleged that defendants, mortgage brokers, were securities brokers who had breached a
duty of care when they “manipulated the plaintiffs’ account,” among other claims. The
magistrate judge recommended granting defendants’ motion to dismiss for failure to state a claim
because plaintiffs’ amended complaint did not identify any public offerings, and therefore, there
could be no Section 12 liability.\
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