Broker-Dealer Litigation - Greenberg Traurig LLP

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International Fund Management S.A. v. Citigroup, Inc., 2011 WL 4529640 (S.D.N.Y. Sept. 30,
2011).
Foreign investors brought actions against corporation and others alleging violations of
federal securities laws relating to collateralized debt obligations. The court held that although
investors failed to raise strong inference of scienter required to state § 10(b) securities fraud
claim in connection with write-downs of corporation’s collateralized debt obligations (CDOs).
Investors allegations were sufficient to raise strong inference of recklessness . . . with respect to
corporate officer’s CDO-related statements, investors insufficiently alleged actual reliance, . . .
based on corporation’s alleged misstatements in its filings with Securities and Exchange
Commission (SEC). Investors’ allegations failed to raise strong inference that corporation
recklessly ignored relevant data or otherwise acted with scienter, as required in connection with
its write-downs of collateralized debt obligations (CDO’s), which were allegedly insufficient in
that corporation wrote-down its CDO portfolio by just under half, when relevant indices had lost
nearly all their value. Investors’ allegations, that officer who headed corporation’s investor
relations department received specific information indicating that corporation had billions of
dollars in undisclosed subprime collateralized debt obligation (CDO) exposure, were sufficient to
raise strong inference of recklessness. Securities Exchange Act of 1934 § 10(b), 15 U.S.C.A §
78j(b); 17 C.F.R. § 240.10b-5; Private Securities Litigation Reform Act of 1955, § 101 (b), 15
U.S.C.A. § 78u-4(b)(1).
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Louisiana Municipal Police Employees Retirement System, v. KPMG LLP,, 2011 WL 4629299
(N.D. Ohio Sept. 30, 2011).
Private securities fraud class action alleging that company, officers and outside auditor
participated in fraudulent scheme that caused company to falsify its financial records by
improperly recognizing revenue and manipulating its recording of expenses. The court held that
the Complaint adequately pled scienter against corporate officers. Investor adequately pled
scienter against outside auditor. Investor adequately pled loss causation under Private Securities
Litigation Reform Act (PSLRA). Private Securities Litigation Reform Act of 1995, § 101(b), 15
U.S.C.A. § 78u-4(b)(1,2). 17 C.F.R. § 240.10b-5(b).
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City of Ann Arbor Employees’ Retirement System v. Sunoco Products Co., 2011 WL 5041367
(D.S.C. Oct. 19, 2011).
Investors brought action against corporation and two of its officers, alleging violations of
Securities Exchange Act. The court held that investors’ proposed expert testimony on loss
causation was sufficiently reliable to be admissible; fact issue concerning safe harbor provision
precluded summary judgment; and fact issue regarding scienter precluded summary judgment.
Genuine issue of material fact existed as to whether cautionary language accompanying
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