exhibit 2 - SAP Lawsuit Portal

accounting materiality only, and his report focuses
extensively on the application [*45] of GAAP. (See
Lonchar's Reply in Support of Mot. to Exclude Davis,
Ex. B at P 17.)
3. Disposition
Davis may testify at trial because he has met the
minimum threshold for reliability. However, he may
testify with only with respect to the 2003 restatement; his
testimony with respect to the 2004 restatement will be
excluded pursuant to Rule 26.
IV. MOTIONS FOR SUMMARY JUDGMENT
All Defendants move for summary judgment
regarding the SEC's claims related to the AOL
transaction. Defendants argue that there is insufficient
evidence in the record to support an inference of the
mental states required by the various claims or that any of
their alleged misstatements were material. Separately,
Sallaberry argues that the evidence cannot support a
finding that he was involved in making misstatements
and preparing Veritas's records.
A. Legal standard
Case4:07-cv-01658-PJH Document875-6 Filed09/16/10 Page14 of 33
A motion for summary judgment should be granted
if there is no genuine issue of material fact and the
moving party is entitled to judgment as a matter of law.
Fed. R. Civ. P. 56(c); Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 247-48, 106 S. Ct. 2505, 91 L. Ed. 2d 202
(1986). The standard applied to a motion seeking partial
summary judgment is identical to the standard applied to
a motion [*46] seeking summary judgment of the entire
case. See Urantia Foundation v. Maaherra, 895 F.Supp.
1335, 1335 (D. Ariz. 1995). The moving party bears the
initial burden of informing the Court of the basis for the
motion and identifying the portions of the pleadings,
depositions, answers to interrogatories, admissions, or
affidavits that demonstrate the absence of a triable issue
of material fact. Celotex Corp. v. Catrett, 477 U.S. 317,
323, 106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986).
If the moving party meets this initial burden, the
burden shifts to the non-moving party to present specific
facts showing that there is a genuine issue for trial. Fed.
R. Civ. P. 56(e); Celotex, 477 U.S. at 324. A genuine
issue for trial exists if the non-moving party presents
evidence from which a reasonable jury, viewing the
evidence in the light most favorable to that party, could
2010 U.S. Dist. LEXIS 76826, *44
resolve the material issue in his or her favor. Anderson,
477 U.S. 242, 248-49, 106 S. Ct. 2505, 91 L. Ed. 2d 202;
Barlow v. Ground, 943 F.2d 1132, 1134-36 (9th Cir.
1991). It is not this Court's task to "scour the record in
search of a genuine issue of triable fact." Keenan v. Allan,
91 F.3d 1275, 1279 (9th Cir. 1996) (internal citations and
quotations omitted). The non-moving party has the
responsibility [*47] to identify with reasonable
particularity the evidence which precludes summary
judgment. See id.
B. Requisite mental states
The SEC's claims require a showing of various
mental states. To establish a claim under Section 17(a)(1)
and Rule 10b-5, the SEC must prove that the Defendants
acted with scienter. S.E.C. v. Leslie, No. C 07-3444, 2008
U.S. Dist. LEXIS 79790, 2008 WL 3876169, at *5 (N.D.
Cal. Aug. 19, 2008). However, scienter is not required to
establish liability under Sections 13b2-1 and 13b2-2. 12 ,
13 S.E.C. v. Leslie, No. C 07-3444 JF, 2008 U.S. Dist.
LEXIS 69540, 2008 WL 4183939, at *1 (N.D. Cal. Sept.
9, 2008). To establish a claim under Section 17(a)(2) and
(a)(3), the SEC must prove that Defendants acted
negligently. SEC v. Phan, 500 F.3d 895, 908 (9th Cir.
2007). To establish a claim for any aiding and abetting
violation, the SEC must establish that Defendants
actually knew of the primary violation and their own role
in furthering it. Leslie, 2008 U.S. Dist. LEXIS 79790,
2008 WL 3876169 at *7. Finally, to establish a claim
under Section 13(b)(5) for failing to implement a system
of internal accounting controls, the plain language of the
statute requires that a defendant act "knowingly." 15
U.S.C.A. § 78m(b)(5).
12 17 C.F.R. 240.13b2-1 provides that "No
person [*48] shall directly or indirectly, falsify or
cause to by falsified, any book, record or account
subject to section 13(b)(2)(A) of the Securities
Exchange Act."
13 17C.F.R. 240.13b2-2(a) provides that: "No
director or officer of an issuer shall, directly or
indirectly:
(1) Make or cause to be made a
materially false or misleading
statement to an accountant in
connection with; or
(2) Omit to state, or cause
another person to omit to state, any
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