Joint Declaration of Stickney and Kessler in Support of Motion for ...

Case 1:09-md-02017-LAK Document 807 Filed 03/08/12 Page 24 of 63
March 17, 2010, the Court denied the pending motions to dismiss without prejudice and granted
Lead Plaintiffs leave to amend. See ECF No. 202.
33. Over the next four weeks, Lead Counsel thoroughly digested the Examiner’s
Report and its supporting documentation. During that process, Lead Counsel compared and
confirmed many of the Examiner’s findings with Lead Counsel’s own prior conclusions based
upon our own independent and ongoing investigation.
34. On April 23, 2010, four weeks after being granted leave to amend, Lead Plaintiffs
filed the Third Amended Class Action Complaint (the “Complaint”), attached as Exhibit 1. The
Complaint alleged that Defendants’ public statements, including the offering materials, contained
material misstatements, and omitted to state facts necessary to make the representations
contained in the offering materials not materially misleading, concerning:
(a)
(b)
(c)
(d)
(e)
Lehman’s use of Repo 105 transactions as gimmicks to reduce Lehman’s
net leverage ratio and to create the appearance of balance sheet strength;
Lehman’s concealment of its true liquidity position and its liquidity risk;
Lehman’s risk management and its routine disregard and override of risk
limits;
Lehman’s failure to record its commercial real estate assets at fair market
value; and
Lehman’s failure to disclose material facts concerning its concentration of
risky assets.
E. Defendants’ Second Round Of Motions
To Dismiss And Lead Plaintiffs’ Responses
35. On June 4, 2010, the D&O and Underwriter Defendants and UBSFS filed a joint
motion to dismiss the Complaint, which included 90 pages of briefing and appendices and over
2,800 pages of exhibits, ECF Nos. 224-26, arguing, among other things, that the Complaint
should be dismissed because:
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