Declaration Of Helen J. Hodges In Support Of Lead Counsel's ...

Lead Plaintiff had adequately alleged scienter and control person liability. The Court ruled that the
allegations were insufficient to state a claim under §10(b), but were sufficient to state claims against
certain of the moving defendants under §20(a) for control person liability. See 1/28/03
Memorandum and Order of Partial Dismissal of Claims Against Individual Andersen Defendants
(Docket No. 1241) at 58.
87. On May 8, 2002, Outside Director defendants Robert A. Belfer, Norman P. Blake, Jr.,
Ronnie C. Chan, John H. Duncan, Joe H. Foy, Wendy L. Gramm, Robert Jaedicke, Charles A.
LeMaistre, John Mendelsohn, Jerome Meyer, Paulo Ferraz Pereira, Frank Savage, John Wakeham,
Charls E. Walker, Herbert S. Winokur and John A. Urquhart filed motions to dismiss (Docket Nos.
618, 661, 662, 647). These defendants argued for dismissal of the §10 and §20A claims because the
Consolidated Complaint relied on the use of group pleading, failed to adequately allege scienter, and
sought imposition of liability for performing the routine director functions at Enron. They argued
for dismissal of the §11 and §15 claims because there is no liability under the statute for private
placements, some of the defendants did not serve on Enron’s Board at the time of the subject
offerings, false or misleading statements had not been identified, reliance was not pled when
required, the defendants relied on experts, the pleading of the claims failed to comply with Rule 9(b),
and the claims fail to allege that the defendants acted in bad faith. The defendants also argued for
dismissal of the controlling person claims because the complaint failed to allege a primary violation,
sufficient control, and culpable participation in the wrongdoing. The defendants also argued that the
TSA claim by plaintiff The Washington State Investment Board must be dismissed because of the
timing of the securities purchases, the failure to plead in compliance with Rule 9(b), the failure to
allege misstatements or omissions, and the failure to allege that the defendants were “sellers” under
the TSA.
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