Archives: Pleading

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Judge Engelmayer Sees Conspiracies

Judge Engelmayer’s opinion in In Re Interest Rate Swaps Antitrust Litigation dissects one of the most interesting questions in anti-trust law—when does an anti-trust complaint fail because a plaintiff only alleges parallel conduct by companies acting in their own self-interest, as opposed to a conspiracy or agreement between them to act in concert. “The crucial question…is … Continue Reading

Judge Pauley’s Special Relationships

When sophisticated investors carefully document their relationship, it’s unusual to see a claim for negligent misrepresentation. After all, sophisticated parties typically are only held to those commitments they agree to in writing. But as Judge Pauley’s opinion in Kortright v Investcorp teaches, unusual is not the same as never. Investcorp, a well-known investment adviser, agreed to … Continue Reading

Judge Scheindlin Keeps Rating Agencies on the Hot Seat (Update on DOJ Filing)

Judge Scheindlin continues to define the law for rating agencies, finding that they don’t have immunity from fraud claims on the ground that their ratings are merely their own opinions, not statements of fact. That’s pretty significant for lawsuits arising out of the subprime mortgage meltdown. Here’s how she nicely sums up the essence of … Continue Reading

Judge Crotty on Foreign Entanglements

Yulia Tymoshenko is the former prime minister of the Ukraine, and was one its most successful businesswomen, reportedly making a fortune in the natural gas industry. Today, however, she is serving a seven year prison sentence in the Ukraine for abuse of power and for working against the Ukraine’s interests while in office by agreeing … Continue Reading

Judge Scheindlin on Watching Sports

Even an avid sports fan might reasonably believe that there’s no shortage of sports programming on television. But according to Judge Scheindlin in Laumann v. National Hockey League, predatory practices by the National Hockey League and Major League Baseball, and television providers, may be restricting choice and pushing up the cost of watching our favorite teams. … Continue Reading

Judge Engelmayer Shoots Down a Starr

Starr International, a shareholder of AIG, is run by AIG’s former leader, Hank Greenberg. In Starr Intern’l v. Federal Reserve Bank of New York, Judge Engelmayer takes on Starr’s charge that the FRBNY ran roughshod over AIG’s shareholders when it bailed out AIG during the 2008 financial crisis. Judge Engelmayer describes Starr’s complaint as painting … Continue Reading

Judge Netburn on PLSRA and Prejudice

The Private Litigation Securities Reform Act of 1995 was passed (over Bill Clinton’s veto) in order to limit frivolous federal securities fraud lawsuits. The Act established strict pleading requirements, and, in order to reduce the costs of litigation, barred discovery during the pendency of a motion to dismiss, which is the routine first line of … Continue Reading

Judge Forrest on “Fabulous Fab” and Securities Fraud

In SEC v. Tourre, Judge Forrest rejected the SEC’s motion to reconsider part of its complaint against Fabrice Tourre, the thirty-something Goldman executive involved in selling subprime mortgage securities to Goldman clients. In an e-mail, Tourre unfortunately referred to himself as ‘Fabulous Fab’ for standing tall while the subprime mortgage market collapsed – a moniker that … Continue Reading

Judge Scheindlin on Reformation and Mutual Mistake

Subprime mortgage litigation doesn’t always pit shareholders against banks which invested unwisely. Banks have been suing each other, too.  Exhibit A is Judge Scheindlin’s most recent opinion in Citibank v. Morgan Stanley, which provides a great primer on reformation and mutual mistake between “two of the most sophisticated financial institutions in the world.” The opinion … Continue Reading

Judge Sweet On Bear Stearns’ Meltdown

Judge Sweet’s 400 page decision in In re Bear Stearns Companies, Inc. takes us through the collapse of Bear Stearns from three perspectives: a Securities Fraud Complaint against Bear and its accountants, a Derivative Complaint brought by former Bear shareholders who became shareholders of JP Morgan Chase when it acquired Bear in May 30, 2008, and an ERISA … Continue Reading

Judge Koeltl on the Implied Covenant of Good Faith and Fair Dealing

Judge Koeltl’s opinion in First American Intern. Bank v. The Community’s Bank (S.D.N.Y.) presents an interesting example of a claim for breach of the implied covenant of good faith and fair dealing.  Since the implied covenant of good faith occasionally serves as a “Hail Mary” for litigants who can’t identify a more conventional contract claim, it’s useful to see … Continue Reading

Judge Crotty Dismisses Negligence Based Securities Claims Against Barclays Despite Losses of £30 Billion

Several of our posts (here, here and here) have discussed the challenges in asserting fraud claims under Section 10(b) of the 1934 Securities Exchange Act.  But, it’s not easy to bring negligence and strict liability claims under Section 11 and 12(a)(2) of the 1933 Securities Act either, as Judge Crotty points out in a clear and crisp opinion … Continue Reading

Judge Baer Dismisses $2 Billion Securities Fraud Claim by U.S. Funds as Extra-Territorial

It is not easy to plead a viable federal securities fraud claim, what with the requirements of the Private Securities Litigation Reform Act, the Supreme Court’s tightening of Rule 8 pleading standards, and the ever more muscular application of the particularity requirements of Rule 9(b).  Now Judge Baer has further upped the ante in Elliott Associates … Continue Reading

Judge Preska on the “Sole Shareholder” Rule and Pleading Contract and Fraud Claims

Judge Preska’s valuable opinion in IMG Fragrance Brands, LLC v. Houbigant, Inc.,09 CV 3655 (LAP) untangles the financial dealings of Plaintiffs (IMG), the licensees of fragrance trademarks from the Defendants (Houbigant).  The opinion includes a neat summary of the application of the common law “sole shareholder rule” to claims of fiduciary breach.  The sole shareholder … Continue Reading