Court Finds Plaintiff's New Evidence Insufficient to Satisfy PSLRA Pleading Requirements

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[authors: Michael S. Gordon, Jason F. Clouser]

In a securities fraud action, a Colorado district court denied a plaintiff employees’ retirement plan’s motion for relief from a final judgment that dismissed the plaintiff’s original complaint because it did not satisfy the pleading requirements of the Private Securities Litigation Reform Act (PSLRA). The plaintiff filed the motion after obtaining transcripts of testimony given to the Securities and Exchange Commission by the defendants, the CEO and COO of C-BASS, a firm in the business of buying, packaging and reselling subprime mortgage loans. Pointing to SEC transcripts, the plaintiff contended that the CEO and COO had made fraudulent statements regarding C-BASS during a quarterly conference call regarding another company. The court analyzed the statements at issue and found that the transcripts did not show that the statements were false. In one instance, the court found that although the defendants knew July 2007 would be a volatile month, nothing in the transcripts showed that, as the plaintiff maintained throughout the case, the defendants knew as of July 19, 2007, that C-BASS was about to be overwhelmed by margin calls from lenders. Having found that the plaintiff’s new evidence was not likely to change the outcome of the case as required by Federal Rule of Civil Procedure 60(b)(2), the court denied plaintiff’s motion for relief from judgment.

Fulton County Employees’ Retirement System v. MGIC Inv. Corp., No. 8-C-0458, 2012 WL 4739797 (E.D.Wis. Oct. 3, 2012).

 

Published In: Business Torts Updates, Civil Procedure Updates, Securities Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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