Broker-Dealer Litigation - Greenberg Traurig LLP

Connecticut Retirement Plans and Trust Funds v. Amgen Inc., 660 F.3d 1170 (9th Cir. 2011).
C.1.d
Investors brought putative class action against a biotechnology company and its
individual officers and directors alleging securities fraud. The district court certified the class
and defendants appealed. The district court based certification on the “fraud on the market
presumption” which requires a showing that the market was efficient and whether the purported
falsehoods were public. Defendants’ claim that alleged misrepresentations were immaterial, did
not sway court as it determined that materiality is a trial issue, not one for certification.
Furthermore, defendants would have to assert a defense to the fraud on the market presumption
at trial. The court, in upholding certification, held that proof of materiality is not necessary to
ensure that the question of reliance is common among all prospective class members’ securities
fraud claims. Plaintiffs need only allege materiality with sufficient plausibility to withstand a
12(b)(6) motion.
Reese v. BP Exploration (Alaska) Inc., 643 F.3d 681 (9th Cir. 2011).
C.1.d
Shareholder brought punitive class action for securities fraud against oil company and
related defendants. The Court of Appeals held that royalty trust’s periodic filing with Securities
and Exchange Commission (SEC) of its contract with oil company, in compliance with its legal
obligations, would not be viewed by reasonable investor as certifying company’s ongoing
compliance with agreement’s “prudent operator standard” provision, and therefore company’s
alleged subsequent breach of prudent operator standard did not provide actionable
misrepresentation supporting private securities fraud claim. Securities Exchange Act of 1934 §
10(b), 15 U.S.C.A § 78j(b); 17 C.F.R. § 240.10b-5.
Strategic Diversity, Inc. v. Alchemix Corp., 666 F.3d 1197 (9th Cir. 2012).
C.1.d
Plaintiff invested in defendant alternative fuels start-up company. Plaintiff sued, seeking,
inter alia, rescission of the transaction. The Court of Appeals held that true rescission was not
available but that the district court had discretion to consider a rescissionary measure of
damages, i.e., “any rescissionary damage award should be offset by the value of the stock as well
as any other benefits incurred after the transaction.” Nevertheless, the rescissionary approach
still requires plaintiff to show loss causation, that the alleged conduct caused the loss.
WPP Luxembourg Gamma Three Sarl v. Spot Runner, Inc., 655 F.3d 1039 (9th Cir. 2011).
C.1.d
Defendant executives solicited plaintiff to invest in company at a time while the company
founders engaged in undisclosed sale of personally owned shares in the company which was
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