Securities Law Alert, August 2012
This month’s Alert addresses three decisions from the Second Circuit: one holding that price recovery does not defeat an inference of economic loss in securities fraud suits; another ruling that the SEC need not establish proximate causation in aiding and abetting actions brought under Section 20(e); and a third finding that an investor in a collateralized debt obligation (“CDO”) was a third-party beneficiary of the CDO’s portfolio management agreement.
We also discuss a Southern District of New York decision relying on Fait v. Regions Financial Corp. to dismiss a securities fraud suit against Deutsche Bank. In addition, we address a ruling from the Supreme Court of Pennsylvania holding that Section 1105 of Pennsylvania’s Business Corporation Law precludes post-merger remedies other than appraisal except in cases of fraud or fundamental unfairness. Finally, we cover a First Department of New York opinion adopting Delaware’s test for determining whether a claim is direct or derivative.