In a significant decision on federal securities pleading standards, the Sixth Circuit—led in this case by Judge Karen Nelson Moore—has attempted to clarify the previously and self-admittedly “muddied” waters of pleading standards in securities litigation. Last year, the Sixth Circuit diverged from the Second and Ninth as to whether § 11 of the Securities Act … Continue Reading
In a precedent-setting opinion, the Sixth Circuit recently held that mutual fund shareholders are barred from asserting state-law fraud claims for periods when the plaintiffs held their shares, versus fraud that occurred during the purchaseof those shares. This decision also foreshadows the Sixth Circuit’s view that improper class actions must be dismissed in their entirety under SLUSA (not just selected … Continue Reading
From its founding in 1990 until the time of its Chapter 11 collapse in November 2002, National Century Financial Enterprises, Inc. (“NCFE”) grew into one of the largest healthcare finance companies in the United States. NCFE’s business was to finance healthcare providers by purchasing their accounts receivables payable to private insurers and public healthcare programs, … Continue Reading
In Ashland, Inc. v. Oppenheimer, No. 10-5305 (6th Cir. July 28, 2011).pdf, the Sixth Circuit eschewed the checklist of non-exhaustive factors set forth in Helwig v. Vencor Inc., 251 F.3d 540, 552 (6th Cir. 2001).pdf, for analyzing scienter in securities-fraud cases. Instead, the Sixth Circuit, in an opinion by Judge Cook, followed the “holistic” approach … Continue Reading
On Wednesday, the Sixth Circuit sent a securities fraud case back to the district court for the third time, after reversing the district court’s second dismissal of the complaint under Fed. R. Civ. P. 8, 9(b) and 12(b)(6). At issue in Frank v. Dana Corp., No. 09-4233 (6th Cir. May 25, 2011).pdf was the sufficiency of … Continue Reading
“In the end, plaintiffs’ allegations do not raise a strong inference that Ernst & Young acted with scienter in affirming Accredo’s allegedly fraudulent accounting. Conclusory allegations about what Ernst & Young must or should have known while auditing Accredo do not amount to specific allegations that show material misstatements or omissions committed with recklessness. Plaintiffs … Continue Reading
