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ARTICLE · 15 SEPTEMBER 2023

Strike Four: Assessing Putative Securities Class For Fourth Time, Second Circuit Tightens Link Between Generic Alleged Misstatements And Specific Corrective Disclosures

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After twelve years of litigation, the Second Circuit has decertified an investor class action lawsuit for the third—and perhaps last—time.

United StatesCorporate/Commercial Law
Joseph De Simone
Joseph De Simone
Michelle J. Annunziata
Michelle J. Annunziata
Jacqueline Vallette
Jacqueline Vallette
Glenn K. Vanzura
Glenn K. Vanzura
Luc W. M. Mitchell
Luc W. M. Mitchell
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After twelve years of litigation, the Second Circuit has decertified an investor class action lawsuit for the third—and perhaps last—time.1 In 2011, following disclosures of conflicts of interest that caused the defendant bank to pay a $550 million fine to the SEC, plaintiffs sued the company for securities fraud, alleging that its earlier public statements such as "Integrity and honesty are at the heart of our business" and "We have extensive procedures and controls that are designed to identify and address conflicts of interest" were false and misleading. After three certifications by the district court, a reversal and affirmance by the Second Circuit, and a reversal by the Supreme Court, the case landed back at the Second Circuit's doorstep.

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