Plaintiffs Seek To Revive Securities Fraud Class Actions Under Second Circuit’s "Class Standing" Doctrine

Keywords: Securities Act, defendant, Fraud, Class Actions, Class Standing

I previously blogged about the Second Circuit's troubling decision in NECA-IBEW Health & Welfare Fund v. Goldman Sachs & Co. (pdf), 693 F.3d 145 (2d Cir. 2012), which invented a "class standing" doctrine allowing a named plaintiff in a class action to assert Securities Act claims regarding securities that he or she never purchased. In the wake of that decision, plaintiffs have filed a flurry of motions to reconsider district court decisions that had dismissed claims like these for lack of standing.

So far, a few courts have granted those motions and revived some or all of the previously dismissed claims. E.g., New Jersey Carpenters Health Fund v. DLJ Mortg. Capital, Inc. (pdf), 2013 WL 357615 (S.D.N.Y. Jan. 23, 2013). But other courts have declined to do so, preferring to wait for a decision on the pending certiorari petition in NECA.