4 Analyses of this case by attorneys

  1. Florida Banks: Beware of Eleventh Circuit Decision Implications

    Foley & Lardner LLPMark WolfsonNovember 23, 2016

    The court determined that the investor had plausibly alleged the third element of substantial assistance. Relying upon Lerner v. Fleet Bank, N.A., 459 F.3d 273, 295 (2nd Circuit 2006), the court explained that “Substantial assistance occurs when a defendant affirmatively assists, helps conceal or fails to act when required to do so, thereby enabling the breach to occur.” The Eleventh Circuit added that “[m]ere inaction constitutes substantial assistance only if the defendant owes a fiduciary duty directly to the plaintiff.”

  2. Disclaimer Neutralized Alleged False Advertising

    Kramer Levin Naftalis & Frankel LLPAugust 8, 2016

    As to the second, though mental states may be pleaded “generally,” Plaintiffs must nonetheless allege facts “that give rise to a strong inference of fraudulent intent.” Lerner v. Fleet Bank, N.A., 459 F.3d 273, 290–91 (2d Cir. 2006). Loreley Fin. (Jersey) No. 3 Ltd. v. Wells Fargo Sec., LLC, 797 F.3d 160, 171 (2d Cir. 2015).

  3. Zito v. United Technologies Corp., No. 3:15-cv-00744, 2016 WL 2946157 (D. Conn. Mar. 11, 2016)

    Kramer Levin Naftalis & Frankel LLPAugust 8, 2016

    As to the second, though mental states may be pleaded “generally,” Plaintiffs must nonetheless allege facts “that give rise to a strong inference of fraudulent intent.” Lerner v. Fleet Bank, N.A., 459 F.3d 273, 290–91 (2d Cir. 2006).Loreley Fin. (Jersey) No. 3 Ltd. v. Wells Fargo Sec., LLC, 797 F.3d 160, 171 (2d Cir. 2015).

  4. Does Tellabs Have Any Impact In the Second Circuit?

    Dorsey & Whitney LLPThomas O. GormanJune 26, 2008

    In discussing the adequacy of the complaint with respect to pleading scienter, the circuit court did not cite or discuss the Supreme Court’s decision last year in Tellabs v. Makor Issues & Rights, Ltd., 128 S.Ct. 761 (2007). Rather, the court relied on one of its own pre-Tellabs decision, applying the two-prong test crafted prior to the passage of the PSLRA: “We have held that a securities fraud plaintiff’s scienter allegations must ‘give rise to a strong inference of fraudulent intent,’ and that such a plaintiff may establish the requisite intent either ‘(a) by alleging facts to show that defendants had both motive and opportunity to commit fraud, or (b) by alleging facts that constitute strong circumstantial evidence of conscious misbehavior or recklessness,” quoting Learner v. Fleet Bank, N.A., 459 F.3d 273, 290-91 (2d Cir. 2006). In analyzing the scienter allegations in the Bay Harbour complaint, the circuit court applied its traditional two-prong test of scienter rather than Tellabs.