People who commit to buy a stock on Day 1 can't complain about misrepresentations that the stock issuer made on Day 2 or later. E.g., APA Excelsior III L.P. v. Premiere Techs., Inc., 476 F.3d 1261, 1267 (11th Cir. 2007). The later lies could not have induced you to buy the shares, the theory
Snappy and Bitey Discuss Italian Cowboy
Scene: A cafe in Uptown Dallas. Noonish. Sunlight streams through half-open vertical blinds. The beams hurt your eyes. Or they would if you hadn't left as soon as Bitey started talking about the Italian Cowboy case.
Bitey: Just think, Snappy, the Supreme Court of Texas just ruled for plaintiffs last week! Shazaam!
Snappy: Imagine my surprise.
Bitey: A landlord told a…
Second Circuit Calls Recess for Zyprexa Class
The Second Circuit last week prescribed death for a class action alleging that Eli Lilly and Company fooled doctors into treating patients with Lily's anti-schizophrenia drug Zyprexa.
The plaintiffs — unions and others that pay all or part of patients' pharmaceutical bills — alleged that Lilly violated the Racketeer-Influenced and Corrupt Organizations Act by hiding and misrepresenting…
Third Circuit Rejects Shores v. Sklar Securities Fraud Theory
Whether to treat a securities fraud case on a class basis often turns on whether the court may presume that class members relied on false statements or omissions by the defendants.
The most common form of presumption — the fraud on the market theory – won the Supreme Court's okay in Basic, Inc. v. Levinson, 485…
False Rep on Mortgages Didn’t Support Fraud Claim, Fifth Circuit Holds
The subprime residential mortgage business got much of its lending money from big banks. Wall Street in turn acquired the cash by pooling thousands of subprime mortgages into securities and selling the paper to investors.
In 2007, Lone Star bought $61 million of such securities from Barclays Bank and Barclays Capital. The deal documents…