NASD Manual Conduct Rule 2210 ................................................85 LEGISLATIVE HISTORY H.R. No. 104-369 (1995) .......................................................33 S. Rep. No. 104-98 (1995) ......................................................32 S. Rep. No. 107-205 (2002) .....................................................79 xiv
Alan G. Hevesi, Comptroller <strong>of</strong> the State <strong>of</strong> New York, as Adm<strong>in</strong>istrative Head <strong>of</strong> the New York State and Local Retirement Systems and as Trustee <strong>of</strong> the New York State Common Retirement Fund (the “NYSCRF” or “<strong>Lead</strong> Pla<strong>in</strong>tiff”), respectfully submits this memorandum <strong>of</strong> law <strong>in</strong> opposition <strong>to</strong> the motions <strong>to</strong> dismiss filed by Defendants Salomon Smith Barney Inc. (“Salomon”), Banc <strong>of</strong> America Securities LLC, Deutsche Bank Alex. Brown Inc. (n/k/a Deutsche Bank Securities, Inc.), Chase Securities Inc. (n/k/a J.P. Morgan Securities Inc.), Lehman Brothers Inc., Blaylock & Partners, L.P., Credit Suisse First Bos<strong>to</strong>n Corporation, Goldman, Sachs & Co., UBS Warburg LLC, ABN AMRO Incorporated, Utendahl Capital Partners, L.P., BNP Paribas Securities Corp., Fleet Securities, Inc. and J.P. Morgan Chase & Co. (<strong>to</strong>gether, the “Underwriter Defendants”); 1 Citigroup, Inc., Salomon and Jack Grubman (<strong>to</strong>gether, the “Salomon Defendants”); Clifford Alexander, Jr., James Allen, Judith Areen, Carl Aycock, Max Bobbitt, Francesco Galesi, Stiles Kellett, Jr., Gordon Mackl<strong>in</strong>, John Porter, Bert Roberts, Jr., John Sidgmore, and <strong>Law</strong>rence Tucker (<strong>to</strong>gether, the “Direc<strong>to</strong>r Defendants”); Arthur Andersen LLP (“Andersen”) and Melv<strong>in</strong> Dick (“Dick”) (<strong>to</strong>gether, the “Andersen Defendants”); 2 and Bernard Ebbers. 3 1 <strong>Lead</strong> Pla<strong>in</strong>tiff is <strong>in</strong> the process <strong>of</strong> serv<strong>in</strong>g four non-mov<strong>in</strong>g underwriters named <strong>in</strong> its compla<strong>in</strong>t -- Cabo<strong>to</strong> Hold<strong>in</strong>g SIM S.p.A., Mizuho International plc, Tokyo-Mitsubishi International plc, and Westdeutsche Landesbank Girozentrale (n/k/a WestLB AG) -- through the Hague Convention. Counsel for the Underwriter Defendants have <strong>in</strong>dicated that they have asked these Defendants for permission <strong>to</strong> accept service on their behalf. 2 <strong>Lead</strong> Pla<strong>in</strong>tiff has yet <strong>to</strong> locate and serve former Andersen partner Mark Schoppet, and Andersen’s counsel has refused <strong>to</strong> accept service on this Defendant’s behalf. Counsel for Defendants Arthur Andersen UK and Andersen Worldwide SC have recently accepted service and requested extensions <strong>of</strong> their time <strong>to</strong> respond <strong>to</strong> the compla<strong>in</strong>t. The NYSCRF agreed <strong>to</strong> those requests, and the parties will submit a proposed brief<strong>in</strong>g schedule <strong>to</strong> the Court shortly. 3 On December 5, 2002, the Court granted the motions <strong>of</strong> Defendants Scott Sullivan and David Myers for a stay <strong>of</strong> further proceed<strong>in</strong>gs aga<strong>in</strong>st them <strong>in</strong> both this litigation and the parallel WorldCom ERISA litigation until the crim<strong>in</strong>al charges pend<strong>in</strong>g aga<strong>in</strong>st them <strong>in</strong> this District have been
- Page 1 and 2: UNITED STATES DISTRICT COURT SOUTHE
- Page 3 and 4: TABLE OF CONTENTS TABLE OF AUTHORIT
- Page 5 and 6: POINT III .........................
- Page 7 and 8: Capri v. Murphy, 856 F.2d 473 (2d C
- Page 9 and 10: Admin. Proc. File No. 3-4390, 1975
- Page 11 and 12: 143 F. Supp. 2d 304 (S.D.N.Y. 2001)
- Page 13 and 14: Milman v. Box Hill Sys. Corp., 192
- Page 15: Taylor v. Vermont Dept. of Educ., 3
- Page 19 and 20: arguments withstands scrutiny. They
- Page 21 and 22: Asset Management, Inc. (“HGK”)
- Page 23 and 24: WorldCom’s stock and bonds. Moreo
- Page 25 and 26: illion. 5. 6 The accounting fraud,
- Page 27 and 28: method of committing financial frau
- Page 29 and 30: ampant “internal chicanery and co
- Page 31 and 32: would have seen billions of dollars
- Page 33 and 34: esponsibilities to investors. By th
- Page 35 and 36: even went so far as to ridicule inv
- Page 37 and 38: million. 228. Salomon often alloca
- Page 39 and 40: could of WorldCom, he never informe
- Page 41 and 42: e-mail admitted that he maintained
- Page 43 and 44: (Count IV). The Complaint also alle
- Page 45 and 46: various of the Underwriter Defendan
- Page 47 and 48: ought on behalf of other class memb
- Page 49 and 50: Complaint filed by the NYSCRF -- as
- Page 51 and 52: The Underwriter Defendants assert t
- Page 53 and 54: The plain language of Section 11 es
- Page 55 and 56: Retirement Income Security Act (“
- Page 57 and 58: inconsistent with the overall purpo
- Page 59 and 60: Pollack v. Laidlaw Hold., Inc., No.
- Page 61 and 62: POINT II THE COMPLAINT STATES CLAIM
- Page 63 and 64: omitted); see also Cromer Finance,
- Page 65 and 66: his hand-picked CFO, then ordered t
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In addition, Ebbers contends that t
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much in charge and knowledgeable ab
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Ebbers’ motive to artificially in
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they specifically made. For example
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public statements, (b) failed to re
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Exchange and the National Associati
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Similarly, the Complaint alleges sc
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Tex. 2002). Significantly, each of
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For all these reasons, the fraud cl
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Further, the Complaint provides gre
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the other hand, when tidal waves of
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See Complete Mgmt. Inc. Sec. Litig.
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exerted” by U.S. senior finance m
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discredited this hypothesis. The ra
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statements for the Offerings or in
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ecommended violated anti-fraud prov
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y failing to disclose to his custom
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at the time the reports were issued
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2. Grubman’s Buy Recommendations
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continue to pursue the acquisitions
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allegations that establish that the
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facts, if taken as true, are certai
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4. The Complaint Adequately Alleges
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the stock. To the extent that the d
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conflicts of interest between Salom
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allege loss causation. 2000 WL 6406
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In Jacobs v. Coopers & Lybrand, L.L
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issued in connection with the Offer
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settled principle of law that direc
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Named Plaintiffs’ Counsel: BERMAN