Shirley Wohl Kram

This case is a securities litigation in which plaintiffs alleged that Moody's Corporation and executives made misrepresentations that caused stock losses. Defendants moved for reconsideration of the court's earlier partial denial of their motion to dismiss, arguing that the court had misread stock price data, used an improper time frame, and overlooked precedents requiring stronger loss-causation allegations due to an industry downturn or near-total pre-disclosure stock decline. The court denied reconsideration, holding that competitor stock prices showed no market-wide downturn and that Moody's shares lost only 22% of value before the first corrective disclosure, so plaintiffs' Rule 8 pleadings were adequate and loss causation remains an issue for trial; it granted only a minor factual correction to the record.

business & regulatoryprocedure

This case is a putative class action securities fraud suit brought by investors against Moody's Corporation and several of its executives, alleging material misrepresentations and omissions during the class period from February 2006 to October 2007 regarding the company's business independence, conflicts of interest, the meaning and methodology of its credit ratings for structured finance products such as RMBS and CDOs, and its financial results. The complaint also asserted control-person liability claims under Section 20(a) of the Securities Exchange Act. On defendants' motion to dismiss under Rules 12(b)(6) and 9(b) and the PSLRA, the court granted the motion in part and denied it in part, finding that certain categories of alleged misstatements failed to meet the heightened pleading requirements while others sufficiently stated claims.

business & regulatoryprocedure

This case is a putative class action securities fraud suit brought by several New York City pension funds against Take-Two Interactive Software, its subsidiary Rockstar Games, and various officers and directors. The plaintiffs alleged violations of Sections 10(b), 20(a), and 20A of the Securities Exchange Act based on two sets of claims: misleading statements in SEC filings about the content and rating of the video game Grand Theft Auto: San Andreas, and improper options backdating practices. The court ruled on motions to dismiss under Rules 12(b)(6) and 9(b) and the PSLRA, granting the motions in part and denying them in part. It held that certain 10(b) claims regarding the GTA disclosures failed for lack of scienter as to most defendants, while some options backdating claims survived based on adequate allegations of materiality, scienter for several individual defendants and the company, and loss causation tied to a specific SEC investigation disclosure; Section 20(a) and 20A claims were allowed to proceed only to the extent they were derivative of surviving 10(b) claims. The analysis centered on the heightened pleading standards for false statements, scienter (via motive/opportunity or circumstantial evidence), loss causation, and contemporaneous trading in insider trading allegations.

business & regulatoryprocedure

In this securities litigation case, plaintiff Henry alleged that Marsh & McLennan Companies and its directors violated Section 14(a) of the Securities Exchange Act and Rule 14a-9 by omitting material information from 2005 and 2006 proxy statements regarding board responsibility for prior misconduct, benefits to certain officers from a proposed options exchange, and failures by the company's auditor. The claims concerned votes on director re-elections, the options exchange, and auditor ratification. The court granted the defendants' motion to dismiss under Rule 12(b)(6), finding that the defendants had no duty to disclose the omitted information in the proxy statements, and dismissed the third amended complaint with prejudice. The court rejected the res judicata defense but held that the pleading failed to state a claim because the alleged omissions were not required.

business & regulatoryprocedure

The case arose from a class action filed by NASD member Standard Investment Chartered, Inc. challenging the planned regulatory consolidation between the NASD and NYSE, claiming it would disenfranchise members and violated Delaware law during solicitation efforts. After granting limited expedited discovery and then dismissing the complaint for failure to exhaust administrative remedies before the SEC, the court considered defendants' motion for a protective order to prevent disclosure of the acquired documents. The court examined Rule 26(c)'s good cause standard in light of the common law presumption of public access to judicial documents, noting that the weight of the presumption depends on how directly the materials relate to the court's Article III functions. It concluded that additional briefing was required to properly evaluate the documents' relevance and decide the motion.

business & regulatoryprocedure

The case consolidated numerous individual securities fraud actions by opt-out plaintiffs against Ernst & Young, the auditor for AOL and post-merger AOL Time Warner, alleging false certifications of financial statements under GAAP and GAAS in connection with the 2001 AOL-Time Warner merger. Plaintiffs asserted violations of Sections 11 and 15 of the 1933 Act, Sections 10(b), 20(a), and 14(a) of the 1934 Act, and related state laws. The court granted E&Y's Rule 12(b)(6) motion to partially dismiss, holding that state law claims were preempted by SLUSA, that AOL shareholders lacked standing for Section 11 and 14(a) claims tied to the merger registration and proxy statements, and that Section 10(b) claims failed to adequately plead loss causation under Second Circuit precedent. The decision applied the Twombly plausibility standard and limited review to the complaint and incorporated SEC filings.

business & regulatoryprocedure

This case is a consolidated class action securities litigation brought on behalf of purchasers of MMC securities during the period from October 1999 to October 2004 against MMC, its subsidiary Marsh Inc., auditor Deloitte & Touche, and numerous directors and officers. The claims arise from allegations that the defendants made material misstatements and omissions in SEC filings and other disclosures regarding the company's receipt of contingent commissions, risk disclosures, earnings, and business practices in the insurance brokerage industry, following a civil complaint filed by the New York Attorney General. Plaintiffs asserted violations of federal securities laws including Section 10(b) and Rule 10b-5, Section 11, Section 18, control person liability under Sections 15 and 20(a), and various state law claims for fraud and negligent misrepresentation. In an opinion and order addressing the defendants' motions to dismiss under Rule 12(b)(6), Rule 9(b), and the PSLRA, the court granted the motions in part and denied them in part after analyzing the sufficiency of pleadings on issues such as materiality, duty to disclose, scienter, reliance, and loss causation.

business & regulatoryprocedure

In United States v. Ramos, defendant Mario Ramos moved to dismiss a 1998 cocaine conspiracy indictment on speedy trial grounds under the Sixth Amendment and Speedy Trial Act, citing the government's failure to arrest him until March 2004. The court denied the motion, finding that Ramos had fled to the Dominican Republic shortly after the indictment and remained a fugitive, while the government had entered his information into national law enforcement databases, conducted weekly surveillance of his residence for months, periodically checked with informants, and revisited his file every six months without evidence he had returned to the area. Because the government bore no responsibility for the delay and Ramos failed to show particularized prejudice from the passage of time, dismissal was unwarranted.

criminal lawprocedure

In this federal criminal case involving six defendants, one defendant undergoing chemotherapy for lung cancer collapsed dramatically during jury selection, moaning in pain, foaming at the mouth, and requiring paramedics, which caused chaos in the courtroom and hallway while prospective jurors were present. The government moved to dismiss the jury pool and restart selection, while the affected defendant sought severance on medical grounds. The court granted severance to that defendant and dismissed the entire pool, ruling that the incident created irreparable contamination that prevented impartiality. Because the jury had not yet been empaneled and sworn, no double jeopardy attached, and the court exercised its duty to ensure an impartial jury by finding that voir dire or instructions could not cure the emotional impact, perceptions of bias from defense versus government actions, and inevitable discussions among the pool.

criminal lawprocedure

The case concerns a motion by SHL Company LLC, a U.S. noteholder, to withdraw from the bankruptcy court a dispute with Cablevision S.A., an Argentine cable company, over Cablevision's proposed debt restructuring under an Argentine extrajudicial procedure that would exchange notes for roughly half their value. Cablevision had initiated a Section 304 proceeding in bankruptcy court to stay SHL's separate federal action alleging violations of the Trust Indenture Act and Williams Act. The district court granted the motion to withdraw the reference, holding that mandatory withdrawal under 28 U.S.C. § 157(d) was required because the case involves substantial and material questions of interpretation under non-bankruptcy federal statutes and potential conflicts with the Bankruptcy Code that must be resolved by an Article III court.

business & regulatoryprocedure

This case involved consolidated securities class action claims by investors, led by the Minnesota State Board of Investment, against AOL Time Warner, its executives, auditor Ernst & Young, and various underwriters, alleging violations of Sections 11, 12(a)(2), 10(b), 14(a), and related control person liability provisions arising from alleged misstatements about advertising revenue and unconventional transactions in merger registration statements and financial reports around the 2001 AOL-Time Warner merger. The court ruled on multiple motions to dismiss, holding that the amended complaint was timely under the Sarbanes-Oxley Act's extended limitations period because an ordinary investor would not have discovered the alleged fraud before July 2002, that many Section 10(b) and Section 11 claims were pled with sufficient particularity and supported a strong inference of scienter based on recklessness for corporate defendants and certain individuals, and that loss causation was adequately alleged. However, it dismissed Section 11 and 12(a)(2) claims against bond underwriters and some individuals for lack of standing or injury in fact, dismissed certain control person claims, and granted partial dismissal as to Ernst & Young and other defendants while permitting limited repleading. The core reasoning focused on application of the PSLRA pleading standards, the bespeaks caution doctrine, judicial notice of market prices, and distinctions between motive/opportunity and conscious misbehavior or recklessness in inferring fraudulent intent.

business & regulatoryprocedure

In this case, insurance company plaintiffs sued EMAC and related defendants for securities fraud under Section 10(b) of the Securities Exchange Act and Rule 10b-5, alleging material misstatements and omissions about EMAC's lending practices in connection with the plaintiffs' purchases of securities interests in loan pools. The complaints, filed in 2002 and amended in 2003, concerned transactions from 1998-2000 that the plaintiffs conceded were time-barred under the pre-existing statute of limitations before the Sarbanes-Oxley Act took effect in July 2002. All defendants moved to dismiss under Rule 12(b)(6), Rule 9(b), and the PSLRA. The court granted the motions, ruling that Section 804 of Sarbanes-Oxley does not revive previously expired claims. It reasoned that extending a limitations period to revive moribund claims would impermissibly alter substantive rights, consistent with Supreme Court precedent such as Hughes Aircraft Co. v. United States ex rel. Schumer, and that the Act lacked clear language authorizing such retroactive application.

business & regulatoryprocedure

In Mensah v. World Truck Corp., the plaintiff sued the defendants in New York state court over injuries from a 1999 car accident, after which the defendants removed the case to federal court based on diversity jurisdiction; two related lawsuits by passengers in the plaintiff's vehicle remained in state court. The defendants later moved to remand the federal case so it could be consolidated with the state actions for a single trial, a request the plaintiff did not oppose. Although the remand motion was filed well beyond the 30-day statutory deadline, the court waived the timeliness defect because both sides supported it. Applying the equitable considerations underlying 28 U.S.C. § 1447(e), the court remanded the case to the Bronx County Supreme Court to prevent duplicative litigation and the risk of inconsistent verdicts across multiple forums.

proceduretorts & liability

The case involves defendants charged in a seven-count indictment with conspiracy, securities fraud, and mail fraud arising from an alleged scheme to pay undisclosed bribes to stockbrokers selling shares in two private placements of Jackpot Entertainment Magazine stock. Multiple defendants filed pretrial motions seeking suppression of wiretap evidence obtained under Title III, various discovery and disclosure orders, dismissal of the conspiracy count, severance, a bill of particulars, and joinder of co-defendants' arguments. The court denied suppression after finding the supporting affidavits established probable cause and necessity for the interceptions, denied accelerated Brady/Giglio and expert disclosures as well as the motions to dismiss or sever, and denied the bill of particulars while granting 404(b) disclosure and joinder. The rulings rested on the requirements of Title III, Federal Rules of Evidence and Criminal Procedure, and established standards for pretrial discovery and joinder in conspiracy cases.

criminal lawprocedurebusiness & regulatory

In United States v. Tavarez, the defendant, who had pleaded guilty to conspiracy to distribute cocaine, moved years later to withdraw his plea under Federal Rule of Criminal Procedure 32(e), obtain a new Pre-Sentencing Report, recalculate his Sentencing Guidelines, and assert an ineffective assistance of counsel claim based on alleged conflicts involving his prior attorneys. The district court denied the motions in full. The court reasoned that Tavarez had been fully advised of and waived any conflict of interest with his counsel at a Curcio hearing before pleading guilty, that his plea had been knowing and voluntary under Rule 11, that Apprendi v. New Jersey did not require recalculation of the guidelines in this case, and that no evidence showed his later counsel's brief representation fell below constitutional standards under Strickland v. Washington.

criminal lawprocedure

In United States v. Brunet, the defendant pled guilty to unlawful receipt of unregistered firearms under 26 U.S.C. § 5861(d) after an undercover investigation revealed he sought to acquire illegal weapons including machine guns and explosives. The court imposed a sentence of 46 months imprisonment, granting the government's motion for an upward departure from the Sentencing Guidelines range of 27 to 33 months. The core reasoning was that the offense involved multiple especially dangerous National Firearms Act weapons, such as functioning machine guns, and posed a substantial risk of death or bodily injury to multiple individuals, as evidenced by the recovered arsenal, explosives, and related materials. The court applied a one-level departure for the multiple weapons and a two-level departure for the risk factor under U.S.S.G. § 2K2.1 Application Note 16.

criminal lawguns

In United States v. Guastella, six defendants faced a sixteen-count indictment in the Southern District of New York charging them with conspiracy to commit wire fraud, wire fraud, conspiracy to commit money laundering, and related offenses arising from an alleged scheme that defrauded hundreds of investors of over $16 million through nonexistent high-yield currency leasing programs advertised in the Wall Street Journal and online. Defendants moved under Federal Rule of Criminal Procedure 21(b) to transfer venue to the Southern District of Nevada, to compel various discovery items, and for leave to file additional motions. The court denied all motions, applying the ten Platt factors and concluding that defendants had not met their burden to overcome the general rule retaining criminal prosecutions in the original district, while also finding insufficient justification for the discovery and additional-motion requests.

criminal lawprocedure

This consolidated class action involved claims by victims and heirs of Nazi persecution against Austrian and German banks, alleging torts and violations of international law including the conversion of deposited assets, looting of property, and profiting from slave labor between 1933 and 1947. The court approved a partial settlement agreement between the plaintiffs and the Austrian Banks (Bank Austria and Creditanstalt), dismissed all claims against those banks, and denied a pro se motion to intervene by class member Peter Georgi. The decision followed supervised negotiations by a Special Master, preliminary class certification for settlement purposes, a court-approved notice process, a fairness hearing, and review of objections. The court determined the settlement was fair, reasonable, and adequate after considering factors such as the uncertainty of litigation outcomes and the benefits to the class.

civil rightstorts & liabilityprocedure

In this case, the Securities and Exchange Commission sued defendants for alleged violations of federal securities laws involving a scheme to manipulate Marcorp Inc. stock from 1993 to 1994, seeking equitable relief such as injunctions and disgorgement along with civil penalties. The court granted the SEC's and Gruntal & Co.'s motions to dismiss the defendants' third-party complaint and counterclaim under 15 U.S.C. § 78u(g), which bars such claims in SEC actions for equitable relief without the Commission's consent to ensure prompt resolution. The court also granted in part the motion to strike affirmative defenses, eliminating statute of limitations, estoppel, and laches defenses as to the equitable claims because no limitations period applies and the defenses lacked factual or legal support, while denying the strike as to statute of limitations for the civil penalties since those claims fell within the five-year period under 28 U.S.C. § 2462.

business & regulatoryprocedure

In Howard v. Anderson, the plaintiff alleged employment discrimination based on race and gender under Title VII and related laws after her termination from KPMG Peat Marwick, and the court had previously stayed the case for arbitration under a clause in her employment agreement. Howard moved to compel the defendants to cover nearly all arbitration fees imposed by the American Arbitration Association, which totaled thousands of dollars based on her $10 million claim, after her hardship application resulted in only partial deferral. The court denied the motion, reasoning that federal law favors enforcing pre-dispute arbitration agreements for statutory claims like Title VII, that arbitrators are presumed to uphold statutory rights, and that any failure to do so could be addressed later through judicial review of the award. The decision emphasized that requiring payment of fees does not inherently prevent vindication of rights in arbitration.

labor & employmentcivil rightsprocedure