Broker-Dealer Litigation - Greenberg Traurig LLP

C.1.d
Matrixx Initiatives, Inc. v. Siracusano, 131 S.Ct. 1309 (U.S. 2011).
Class action against pharmaceutical company and executives, alleging violation of
federal securities laws by failing to disclose material information including adverse event report
and research studies regarding one of the company’s cold remedy products. The Supreme Court
held that lack of statistical significance of adverse event reports did not necessarily preclude
those reports from being material to reasonable investors, investors sufficiently alleged
materiality and scienter under § 10(b) and Rule 10b-5(b). Scienter was adequately pled under
the Private Securities Litigation Reform Act of 1995 (PSLRA). Securities Exchange Act of 1934
§ 10(b), 15 U.S.C.A. § 78j(b); 17 C.F.R. § 240.10b-5(b).
Janus Capital Group, Inc. v. First Derivative Traders, 131 S. Ct. 2296 (U.S. 2011).
C.1.d
Shareholders of asset management firm that launched mutual funds filed putative class
action alleging that firm and its wholly-owned investment advisor subsidiary separately
negotiated market timing arrangements with certain traders to permit timing in specific funds.
The U.S. District Court dismissed the action and plaintiffs appealed. The U.S. Court of Appeals
reversed and remanded and certiorari was granted to determine whether liable in a private action
under Rule 10b-5 for false statements included plaintiffs’ prospectuses. In reversing the U.S.
Court of Appeals’ decision, the U.S. Supreme Court held that because false statements included
in mutual fund prospectuses were ‘made’ by investment fund, investment advisor and parent
capital group could not be liable in private action under Securities and Exchange Commission
rule prohibiting employment of manipulative and deceptive devices in connection with purchase
or sale of securities.
Hill and NECA-IBEW Pension Fund, v. Gozani, 638 F.3d 40 (1st Cir. 2011).
C.1.d
Shareholder brought securities fraud action against medical device manufacturer and
officers. The Court of Appeals, held that omission from manufacturer’s press release of opinion
regarding manufacturer’s promotion of use of incorrect and possibly fraudulent insurance billing
code for its device did not make statements in press release misleading. Statements in quarterly
report were not made misleading by omission of facts pertaining to use of inappropriate billing
codes for device. Allegations did not establish “pervasive” insurance reimbursement problems
that manufacturer was required to disclose. Statements in quarterly report were not made
misleading due to omissions. Annual report containing extensive risk disclosures was not
materially misleading. Securities Exchange Act of 1934, § 10(b), 15 U.S.C.A. § 78j(b); 17
C.F.R. § 240.10b-5.
62