Broker-Dealer Litigation - Greenberg Traurig LLP

Item 303 and made material misstatements in its offering documents related to its real estate
investments.
In re DVI, Inc. Securities Litigation, 639 F.3d 623 (3d Cir. 2011).
C.1.d
Investors’ class action certification was appealed. Court of appeals affirmed investors’
reliance on fraud on the market theory, except as to defendant law firm whose conduct was not
publicly disclosed and it owed no duty of disclosure to the investors. The court rejected
argument of defendant accounting firm that investor must show loss causation at class
certification stage.
Katyle v. Penn National Gaming, Inc., 637 F.3d 462 (4th Cir. 2011).
C.1.d
Shareholders brought a securities fraud class action. The Court of Appeals held that
purportedly corrective disclosures of delays in states’ regulatory approval process for proposed
buy-out/merger agreement and purportedly corrective disclosures in analysts’ reports were
insufficient to show loss causation. The corporation’s failure to issue press release announcing
state regulatory approval of proposed buy-out/merger did not constitute corrective disclosures
sufficient to show loss causation. Allegations of purportedly corrective disclosures of delays in
states’ regulatory approval process for proposed buyout/merger agreement were insufficient to
show loss causation with sufficient specificity required by Private Securities Litigation Reform
Act (PSLRA). Securities Exchange Act of 1934, § 10(b), 21D(b)(1,2), 15 U.S.C.A. § 78j(b),
78u-4(b)(1,2); 17 C.F.R. § 240.10B-5; Fed.Rules Civ.Proc.Rule 9(b), 28 U.S.C.A.
Ashland, Inc. v. Oppenheimer & Co., Inc., 648 F.3d 461 (6th Cir. 2011).
C.1.d
Action alleging securities fraud claims against broker of auction rate securities (ARS).
The Court of Appeals held that Investor’s allegations failed to give rise to strong inference that
broker acted with scienter when recommending that investor buy ARS, as required to state
§ 10(b) securities fraud claim in connection with meltdown of ARS market. Investor failed to
allege common-law fraud claim with sufficient particularity. Broker’s alleged misstatement to
investor that auction rate securities (ARS) were safe and secure was too vague to qualify as
material misrepresentation. Broker’s description of ARS as safe and secure was a soft
description that escaped objective verification. Securities Exchange Act of 1934 § 10(b), 15
U.S.C.A § 78j(b); 17 C.F.R. § 240.10b-5.
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