Filed June 6, 2011
“To establish loss causation, a plaintiff must show that the economic harm that is suffered occurred as a result of the alleged misrepresentations.” Citibank, N.A., 968 F.2d at 1495. The plaintiff must distinguish the alleged fraud from the “tangle of factors” that affect a stock’s price (Dura, 544 U.S. at 343) and “disaggregate those losses caused by ‘changed economic circumstances, changed investor expectations, new industry-specific or firm-specific facts, conditions, or other events,’ from disclosures of the truth behind the alleged misstatements” (In re Flag Telecom Holdings, Ltd. Sec. Litig., 574 F.3d 29, 36 (2d Cir. 2009) (quoting Dura, 544 U.S. at 342-43)). To plead loss causation, a complaint must therefore “allege facts that support an inference that [defendant’s] misstatements and omissions concealed the circumstances that bear upon the loss suffered such that plaintiffs would have been spared all or an ascertainable portion of that loss absent the fraud.”
Filed April 5, 2010
Second, in order to show loss causation, the alleged loss must be both “foreseeable” and also a “materialization of the concealed risk.” Lentell, 396 F.3d at 173; see also Citibank, 968 F.2d at 1495 (“To establish loss causation a plaintiff must show that the economic harm that it suffered occurred as a result of the alleged misrepresentations.”) (emphasis in original)
Filed August 31, 2015
For losses to be compensable damages under the federal securities laws, the disclosure of the allegedly misrepresented information must be the cause of the decline in the price of the security. Citibank, N.A. v. K-H Corp., 968 F.2d 1489, 1494 (2d Cir. 1992) (“To establish loss causation a plaintiff must show, that the economic harm that it suffered occurred as a result of the alleged misrepresentations.”).
Filed May 15, 2013
Case 1:10-cv-07497-VM-DCF Document 119 Filed 05/15/13 Page 35 of 40 -27- including any offsetting or hedging transactions or sales. See Citibank, N.A. v. K-H Corp., 968 F.2d 1489, 1495 (2d Cir. 1992). Thus, it will be impossible to prove loss causation on a class- wide basis.
Filed January 11, 2013
13 Emergent Capital Inv. Mgmt., LLC v. Stonepath Group, Inc., 343 F.3d 189, 197 (2d Cir. 2003) (discussing common law fraud claim, and citing Citibank NA. v. K-H Corp., 968 F.2d 1489, 1496-97 (2d Cir. 1992) (dismissing common law fraud claim where "the complaint does not detail how the alleged :fraud directly and proximately resulted in Citibank's" injury)). 30 Case 1:08-cv-09265-AJN Document 119 Filed 01/11/13 Page 36 of 47 claims of fraud," the complaint had to show that "the loss was caused by the fraud and not by some intervening event."
Filed December 5, 2012
See AUSA Life Ins. Co. v. Ernst and Young, 206 F.3d 202, 209 (2d Cir. 2000) (“Loss causation is causation in the traditional ‘proximate cause’ sense - the allegedly unlawful conduct caused the economic harm.”); Citibank, N.A. v. K-H Corp., 968 F.2d 1489, 1495 (2d Cir. 1992) (“To establish loss causation a plaintiff must show that the economic harm that it suffered occurred as a result of the alleged misrepresentations.”).
Filed July 27, 2012
When “plaintiff’s loss coincides with a marketwide phenomenon causing comparable losses to other investors”, plaintiff must allege specific facts “which, if proven, would show that its loss was caused by the alleged misstatements as opposed to intervening events”. Lentell v. Merrill Lynch & Co., 396 F.3d 161, 174 (2d Cir. 2005) (internal quotation marks omitted); Citibank N.A. v. K-H Corp., 968 F.2d 1489, 1496-97 (2d Cir. 1992) (affirming dismissal of common law fraud claim because the plaintiff did not adequately allege that the damages suffered were proximately caused by the alleged misrepresentations of defendants). Plaintiffs allege no specific facts showing that Plaintiffs’ losses were caused by Defendants’ alleged fraudulent conduct rather than by the global financial crisis and the decline of the housing market beginning in 2007.
Filed February 29, 2012
Even ignoring Plaintiff’s illogical theory of causation, this type of conclusory allegation fails to “detail how the alleged fraud directly and proximately resulted in” Plaintiff’s losses and is insufficient as a matter of law. Citibank, N.A. v. K-H Corp., 968 F.2d 1489, 1497 (2d Cir. 1992) (affirming dismissal of fraud claim). B. Plaintiff Fails To State A Claim For Negligent Misrepresentation Against OAC
Filed April 19, 2010
As demonstrated supra, these arguments are not only conclusory, but meritless.21 Nor do Plaintiffs address the fact that the drop in share price relied on by Plaintiffs could have been caused by any number of factors. Coronel, 2009 WL 174656, at *31 (declining to find loss causation where “the 20 See, e.g., Dura Pharms., Inc. v. Broudo, 544 U.S. 336 (2005); ATSI Communic’ns, Inc. v. Shaar Fund, Ltd., 493 F.3d 87 (2d Cir. 2007); First Nationwide Bank v. Gelt Funding Corp., 27 F.3d 763 (2d Cir. 1994); Citibank, N.A. v. K-H Corp., 968 F.2d 1489 (2d Cir. 1992); Coronel, 2009 WL 174656; In re Merrill Lynch & Co., Inc. Research Reports Sec.
Filed January 22, 2010
Case 1:09-cv-05347-RPP Document 22 Filed 01/22/2010 Page 54 of 57 - 48 - intervening cause in the sequence of causation – which mandates dismissal. Merrill Lynch, 289 F. Supp. 2d at 419; see also, Citibank, N.A. v. K-H Corp., 968 F.2d 1489, 1496 (2d Cir. 1992).25 I I . PLAINTIFFS DO NOT ADEQUATELY ALLEGE CONTROL PERSON LIABILITY AGAINST THE INDIVIDUAL DEFENDANTS The Amended Complaint also fails to adequately allege a claim against the Individual Defendants under Section 20(a).