SR&P Obtains Dismissal of Client in Federal Securities Fraud Class Action in New York
Paul Reynolds and Jessica Mackaness obtained a dismissal of SRP’s client in a federal securities fraud class action pending in New York City. In In re CannaVest Corp. Securities Litigation, -- F. Supp. 3d --- [2018 WL 1633847] (S.D.N.Y. 2018), the court dismissed SRP’s client, an individual, from a class action brought under sections 10(b) and 20(a) of the Securities Exchange Act of 1934 on a motion to dismiss the complaint brought pursuant to the Private Securities Litigation Reform Act of 1995. In a 46 page opinion, that will shortly be published in the Federal Supplement 3d reporter, the court found, inter alia, that the allegations in the complaint did not adequately allege that SRP’s client “made” any of the challenged statements under applicable federal securities case law so as to be liable under section 10(b) and, also, did not adequately allege that the client “culpably participated” in the issuance of those statements so as to be liable as a “control person” of the company that issued the challenged statements under section 20(a). Although the plaintiffs were granted leave to amend to attempt to allege facts necessary to keep the firm’s client in the lawsuit, they elected not to do so. As this was a significant and complex matter with large exposure, the firm is especially gratified with the result.
