memorandum in response to pretrial order no. 38 - order t - Lehman ...

Case 1:09-md-02017-LAK-GWG Document 1047 Filed 11/13/12 Page 3 of 6Lehman Brothers Securities and ERISA Litigation, 799 F. Supp. 2d at 258, 283 (S.D.N.Y. 2011),as well as class plaintiffs' adequate allegations of scienter, Id. at *292-96, should apply here. TheIndividual Defendants seek dismissal because "the Examiner's Report concluded that 'a trier offact could find that [Repo 105 transactions] were used to create a materially misleading pictureof [Lehman's] financial condition only beginning in late 2007.'" Br. at 6. That identicalargument has been rejected. In re Lehman Bros. Sec. & ERISA Litig., No. 09 MD 2017 (LAK),2012 U.S. Dist. LEXIS 148177, at *45 (S.D.N.Y. Oct. 15,2012) (the Court "declines to limit thetime period with respect to which plaintiffs may seek relief for the alleged failure to disclose theRepo 105 transactions on the basis of the Examiner's opinion.,,).2The Individual Defendants also contend that the misleading or omitted information in theOffering Memo cannot be attributed to them because they did not participate in the offer or saleof the Warrants andlor sign the Offering Memo. The ruling in the EID Class Action is dispositivehere because this Court determined that the Individual Defendants could be held liable forstatements made in Lehman's financial filings that were also incorporated by reference inoffering materials. Lehman, 799 F. Supp. 2d at 264. See Centaur Classic Convertible ArbitrageFund Ltd. v. Countrywide Fin. Corp., 793 F. Supp. 2d 1138 (C.D. Cal. 2011)(finding thatplaintiffs had adequately alleged that individual defendants misrepresented and omitted materialfacts concerning Countrywide's business practices and performance in SEC filings which wereincorporated by reference into an unregistered, privately placed offering memorandum).The AC's substantially mirror the EID Class Action in alleging that E&Y acted withscienter and issued false audit opinions and review reports on Lehman's financial statements,which were not fairly stated and did not comply with GAAP. ~~47, 61-70, 85. Lehman Bros.,2 Plaintiffs in the EID Class Action alleged that Lehman's 2Q 2007 lO-K, filed on July 10, 2007, repeatedinformation contained in its June 12, 2007 Form 8-K. EID Class Action TAC ~44. The June 12, 2007 8-K wasincorporated by reference in the Offering Memo and was issued prior to the June 29, 2007 private placement.2