Lead Plaintiff's Opposition to CSFB MSJ 11/13/06 - The ENRON Fraud

To state a claim on conduct that violates Rule 10b-5(a) and (c), plaintiff must
assert that the defendant (1) committed a deceptive or manipulative act, (2) with
scienter, that (3) the act affected the market for securities or was otherwise in
connection with their purchase of sale, and (4) that the defendant’s actions caused
the plaintiff’s injuries.
Enron, 2006 U.S. Dist. LEXIS 43146, at *88 n.45. And that:
Id. at *87.
To establish a claim under . . . Rule 10b-5(b), a plaintiff must ultimately prove (1)
a material misrepresentation or omission; (2) scienter; (3) a connection between
the purchase or sale of the security and the material misrepresentation or
omission; (4) reliance (or “transaction causation” in fraud-on-the-market cases);
(5) economic loss; and (6) loss causation, i.e., causal connection between the
material misrepresentation or omission and the plaintiff’s actual loss.
As the SEC has emphasized – notably in the context of shareholder lawsuits against third
parties alleged to have engaged in fraudulent transactions with the issuer –
Meritorious private actions under the federal securities laws serve an
important role, both because they provide compensation for investors who have
been harmed by violations of the securities laws and because, as the Supreme
Court has repeatedly recognized, they “provide ‘a most effective weapon in the
enforcement’ of the securities laws and are ‘a necessary supplement to
Commission action.’” Bateman Eichler, Hill Richards, Inc. v. Berner, 472 U.S.
299, 310 (1985) (quoting J.I. Case Co. v. Borak, 377 U.S. 426, 432 (1964)). See
also Blue Chip Stamps v. Manor Drug Stores, 421 U.S. 723, 730 (1975).
Congress, in adopting the Private Securities Litigation Reform Act of 1995, Pub.
L. No. 104-67, reaffirmed that “[p]rivate securities litigation is an indispensable
tool with which defrauded investors can recover their losses” and that private
lawsuits “promote public and global confidence in our capital markets and help to
deter wrongdoing and guarantee that corporate officers, auditors, directors,
lawyers and others properly perform their jobs.” Conference Report on Securities
Litigation Reform, H.R. Rep. No. 369, 104th Cong., 1st Sess. 31 (1995).
SEC Brief (Ex. 3) at 2.
II.
ARGUMENT
A. The Summary Judgment Standard
A motion for summary judgment may only be granted where “there is no genuine issue
as to any material fact and . . . the moving party is entitled to a judgment as a matter of law.”
Fed. R. Civ. P. 56(c). “The party moving for summary judgment has the initial burden of
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