Second Circuit

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Nessim Mezrahi

In the following guest post, Nessim Mezrahi takes a look at the Second Circuit’s November 25, 2020 Summary Order in Lea v. TAL Education Group, in which the appellate court reversed the trial court’s dismissal of a securities class action complaint. Many of the plaintiff’s allegations in the complaint were based on matters first raised in a short seller report, a consideration about which Mezrahi has concerns, as discussed below. Mezrahi is co-founder and CEO of SAR, a securities class action data analytics and software company. I would like to thank Nessim for allowing me to publish his article as a guest post on this site. I welcome guest post submissions from responsible authors on topics of interest to this site’s readers. Please contact me directly if you would like to submit a guest post. Here is Nessim’s article.
Continue Reading Guest Post: Second Circuit Ruling Exposes D&Os to Exchange Act Claims Based on Biased Short-Seller Research

The plaintiffs alleged that when a real estate investment trust (REIT) disclosed that a financially troubled key tenant was making “partial monthly rent payments” — but omitted to mention that the tenant’s rent payments had been funded by an undisclosed loan from the REIT, not from the tenant’s own revenues — the REIT committed securities fraud. The district court dismissed the plaintiffs’ complaint, concluding that the plaintiffs had failed to plead a strong inference that the REIT had acted with the requisite scienter. However, in an interesting August 3, 2020 opinion (here), the Second Circuit reversed the district court, concluding that the plaintiffs’ allegations were sufficient to satisfy the scienter pleading requirements. The opinion includes an interesting analysis of the scienter pleading requirements in an omission case alleging recklessness.
Continue Reading Second Circuit Reverses District Court, Concludes Plaintiffs Adequately Pled Scienter

Tim Hoeffner
Paul Ferrillo

The Second Circuit issued its latest decision in the long running Goldman Sachs Group securities class action litigation on April 7, 2020 (here). In the following guest post, Tim Hoeffner and Paul Ferrillo of the McDermott, Will & Emery law firm take a look at the Second Circuit’s decision and analyze its implications. I would like to thank Tim and Paul for allowing me to publish their article as a guest post on this site. I welcome guest post submissions from responsible authors on topics of interest to this blog’s readers. Please contact me directly if you would like to submit a guest post. Here is Time and Paul’s article.
Continue Reading Guest Post: Close Call in New Second Circuit Class Certification Decision

In an August 24, 2018 opinion in United States v. Hoskins (here), the Second Circuit held that a foreign national cannot be held liable under the FCPA, rejecting the U.S. Department of Justice’s accomplice liability theories. In the following guest post, attorneys from the Paul Weiss law firm take a look at the opinion and review its implications. A version of this article previously was published as a Paul Weiss client memo. I would like to thank the authors for allowing me to publish their article as a guest post on this site. I welcome guest post submissions from responsible authors on topics of interest to this blog’s readers. Please contact me directly if you would like to submit a guest post. Here is the authors’ article.
Continue Reading Guest Post: Second Circuit Rejects FCPA Liability for Foreign Persons

In the following guest post, attorneys from the Paul Weiss law firm take a look at the Second Circuit’s January 12, 2018 decision in Arkansas Teacher Retirement System v. Goldman Sachs Group, Inc. (here), in which the appellate court vacated the district court’s certification of a shareholder class in the securities class action lawsuit arising out of the investment company’s involvement in the creation and marketing of the infamous “built-to-fail” Abacus CDO. A version of this article previously appeared as a Paul Weiss law firm client memo. I would like to thank the authors for their willingness to publish their article as a guest post on this site. I welcome guest post submissions from responsible authors on topics of interest to this site’s readers. Please contact me directly if you would like to submit a guest post. Here is the authors’ guest post.
Continue Reading Guest Post: Second Circuit Holds Defendants’ Fraud-on-the-Market Presumption Rebuttal Need Not Be Conclusive

A recurring issue in securities cases involves the question of when plaintiffs may rely on the presumption of reliance under the fraud on the market doctrine. To invoke the presumption plaintiffs must show that the defendant company’s securities trade on an efficient market, which in turn raises the question of what the plaintiffs must show in order to demonstrate market efficiency. In the following guest post, attorneys from the Paul Weiss law firm review a recent Second Circuit decision on this issue, Waggoner v. Barclays PLC (here). I would like to thank the attorneys from the Paul Weiss law firm for allowing me to publish this article as a guest post. I welcome guest post submissions from responsible authors on topics of interest to this site’s readers. Please contact me directly if you would like to submit a guest post. Here is the Paul Weiss attorneys’ guest post.
Continue Reading Guest Post: Second Circuit: Price Impact Evidence Not Always Necessary to Establish Market Efficiency

paul weiss largeOne of the important and recurring issues under the federal securities laws is the question of whether or not American Pipe tolling applies to the statute of repose in the securities laws’ liability provisions. Specifically, the question is whether or not the three-year limitations period in Section 13 of the ’33 Act may be tolled (under a legal theory known as the American Pipe tolling doctrine) by the filing of a putative securities class action, or rather that the three-year provision cannot be tolled. As discussed here, the U.S. Supreme Court recently dismissed the cert petition in  the Indy Mac case, leaving standing a Second Circuit ruling in that case that the filing of a securities class action lawsuit does not toll the ’33 Act’s statute of repose.

In the following guest post, the attorneys from the Paul Weiss law firm take a look at two recent Second Circuit decisions that raised these questions of tolling under the ’33 Act’s statute of repose. As discussed below, the authors conclude that the Second Circuit’s most recent decisions suggest that statutes of repose generally—and not simply statutes of repose established under the federal securities laws—are immune to tolling.

I would like to thank the attorneys at the Paul Weiss firm for allowing me to publish their guest post on this site. I welcome guest post submissions from responsible authors on topics of interest to this blog’s readers. Please contact me directly if you would like to submit a guest post. Here is the Paul Weiss attorneys’ guest post.
Continue Reading Guest Post: Second Circuit Expands the IndyMac Rule

paul weiss largeOn May 23, 2016, in an interesting development in one of the more high profile lawsuits to arise out of the financial crisis, the Second Circuit reversed the $1.27 billion civil penalty that Southern District of New York Judge Jed Rakoff  imposed on Countrywide and several related defendants in a case involving the company’s sale of mortgages to government sponsored entities. A copy of the Second Circuit’s opinion can be found here.

In the following guest post, attorneys from the Paul Weiss law firm take a look at the Second Circuit’s decision and discusses its implications, particularly with respect to the government’s use of the the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) to prosecute financial institutions’ alleged to have committed financial misconduct.
Continue Reading Guest Post: Second Circuit Strikes Down Imposition of $1.27 Billion FIRREA Penalty

paul weiss largeIn the wake of the U.S. Supreme Court’s March 24, 2015 opinion in Omnicare, Inc. v. Laborers District Council Construction Industry Pension Fund (here), there was a great deal of speculation about what the decision’s practical impact would be and how the case would be applied in the lower courts. On March 4, 2016, the Second Circuit issued an important opinion in Tongue v. Sanofi (here) interpreting and applying Omnicare. In the following guest post, the Paul Weiss law firm take a look at the Sanofi decision and discuss Second Circuit’s narrow interpretation and application of Omnicare, and the Second Circuit’s holding that issuers need not disclose information merely because it cuts against their opinions or projections. I would like to thank the attorneys from Paul Weiss for their willingness to publish their article as a guest post on this site. I welcome guest post submissions on topics of interest to this blog’s readers. Please contact me directly if you would like to submit a guest post. Here is the Paul Weiss attorneys’ guest post.
Continue Reading Guest Post: Second Circuit Ruling in Sanofi Narrowly Interprets Omnicare

pwIn the following guest post, Susanna Buergel, Charles Davidow, Andrew Ehrlich, Brad Karp, Daniel Kramer, Richard Rosen and Audra Soloway, all of whom are litigation partners at Paul, Weiss, Rifkind, Wharton & Garrison LLP who are members of the Firm’s Securities Litigation Practice group explain the significance of the Second Circuit’s decision United States v. …