In re Enron Corp. Securities
Citation | 529 F.Supp.2d 644 |
Decision Date | 05 June 2006 |
Docket Number | No. MDL-1446.,Civil Action No. H-01-3624.,MDL-1446. |
Parties | In re ENRON CORPORATION SECURITIES Derivative & "ERISA" Litigation. Mark Newby, et al., Plaintiffs v. Enron Corporation, et al., Defendants The Regents of the University of California, et al. Individually and On Behalf of All Others Similarly Situated, Plaintiffs, v. Kenneth L. Lay, et al., Defendants. |
Court | U.S. District Court — Southern District of Texas |
The above referenced putative class action alleges violations of sections 10(b), 20(a), and 20A of the Securities Exchange Act of 1934, 15 U.S.C. 78j(b), 78t(a), 78t-1(a), and Rule 10b-5 promulgated thereunder, 17 C.F.R. § 240.1013-5, and of sections 11, 12(a)(2), and 15 of the Securities Act of 1933, 15 U.S.C. §§ 77k, 77l(a), and 77o,1 during a proposed Class Period commencing on October 19, 1998 and ending November 27, 2001.2 Pending before the Court is Lead Plaintiff The Regents of the University of California's amended motion for class certification (# 1445), pursuant to Federal Rule of Civil Procedure 23(a) and (b)(3). A class certification hearing was held on March 7-8, 2006.
Because they are directly relevant to the motion for class certification, this Court also addresses the Deutsche Bank Entities' motion for partial reconsideration and dismissal, or motion to require a second amended complaint before a response by them (# 3791) and Lead Plaintiff's motion for leave to file an amended complaint as to Deutsche Bank and motion for entry of an order requiring Deutsche Bank to answer Lead Plaintiffs amended complaint (# 3903).
Specifically Lead Plaintiff seeks certification of a single plaintiff class3 defined as follows:
[A]ll persons, excluding defendants and members of their immediate families, any officer, director or partner of any defendant, any entity in which a defendant has a controlling interest and the heirs of any such excluded party, who purchased the publicly traded equity and debt securities of Enron Corporation between October 19, 1998 and November 27, 2001, including the publicly traded securities issued by Enron-related entities during the Class Period, the value or repayment of which was dependent upon the credit, financial condition or ability to pay of Enron, and (2) all states or political subdivisions thereof or state pension plans that purchased from defendants Enron's 6.40% Notes due 7/15/06 or 6.95% Notes due 7/15/28, and that authorize the prosecution of their claim pursuant to the Texas Securities Act.4 # 1445 at 1. Plaintiffs have alleged a common scheme to defraud throughout the Class Period and argue that arty of the multiple "separate schemes" raised in opposition by Defendants are part of this single scheme (including SPEs, off-the-book partnerships and transactions, swaps, etc.) to falsify Enron's financial results and defraud its investors. The federal securities laws "reach complex fraudulent schemes as well as lesser misrepresentations or omissions." Shores v. Sklar, 647 F.2d 462, 470 (5th Cir.1981), cert, denied, 459 U.S. 1102, 103 S.Ct. 722, 74 L.Ed.2d 949 (1983).5 Lead Plaintiff insists that the investors relied upon the integrity of the market price and on Enron's reputation as a well run company in determining whether to buy Enron securities: Had they known of the concealed actions of some of the currently objecting Defendants, such as the Financial Institutions, who or which purportedly contributed to the fraudulent scheme but claim Plaintiffs failed to demonstrate reliance, the putative class representatives have testified that they would not have been lured into investing in the company, thereby justifying a presumption of class-wide reliance based on the fraud-on-the-market theory. More recently Lead Plaintiff has alternatively claimed that the class is entitled to a presumption of reliance under Affiliated Ute Citizens of Utah v. United States, 406 U.S. 128, 92 S.Ct. 1456, 31 L.Ed.2d 741 (1972).
Lead Plaintiff proposes that the following plaintiffs, a mixture of individuals and entities, be designated as class representatives: (1) For purchasers of Enron Common Stock, Lead Plaintiff; Robert V. Flint; Amalgamated Bank, as Trustee for the Long View Collective Investment Fund, Long View Core Bond Index Fund and Certain Other Trust Accounts; Hawaii Laborers Pension Plan; George M. Placke; Michael J. Bessire; Dr. Richard Kimmerling; Michael B. Henning; John Zegarski; Joseph C. Speck; Ben L. Schuette; San Francisco City and County Employees' Retirement System; John J. and Charlotte E. Cassidy, as Trustees for the John & Charlotte Cassidy Family Trust; Dr. Fitzhugh Mayo; and (2) for purchasers of Enron Debt, Washington State Investment Board; Employer-Teamsters Local Nos. 175 & 505 Pension Trust Fund; Archdiocese of Milwaukee Supporting Fund, Inc.; Nathaniel Pulsifer, trustee of the Shooters Hill Revocable Trust; Staro Asset Management, L.L.C.; and the Greenville Plumbers Pension Plan; (3) for purchasers of Enron Preferred Stock, Mervin Schwartz, Jr.; and Stephen M. Smith.6
Lead Plaintiff also seeks approval of Lerach Coughlin Stoia Geller Rudman & Robbins LLP as Lead Class Counsel.
Because Lead Plaintiff has settled with Bank of America Corporation the Court does not address its individual brief in opposition, on behalf of itself and Banc of America Securities LLC (# 1778) and...
To continue reading
Request your trial-
In Re Synchronoss Securities Litigation.
...(relying on Cammer ). Since the New York and American Stock Exchanges are examples of open and developed securities markets, see id., and Synchronoss' common stock is registered with the United States Securities and Exchange Commission and traded on the NASDAQ,41 the case at bar is subject ......
-
In Re Remec Incorporated Securities Litigation. This Document Relates To All Actions.
...the effect of a particular event such as a press release ... on the price of a company's stock.” In re Enron Corp. Sec. Derivative & ERISA Litig., 529 F.Supp.2d 644, 720 (S.D.Tex.2006). This statistical method has been accepted by some courts as an appropriate method for determining loss ca......
-
Ranieri v. Advocare Int'l, L.P.
...with their purchase of sale, and (4) that the defendant's actions caused the plaintiff's injuries." In re Enron Corp. Sec. , 529 F.Supp.2d 644, 678 n.45 (S.D. Tex. 2006) (citing In re Parmalat Sec. Litig. , 376 F.Supp.2d 472, 491-92 & n.90 (S.D.N.Y. 2005) ). Because AdvoCare does not addres......
-
In re Libor-Based Fin. Instruments Antitrust Litig.
...of protection charges, capturing ‘the spread between a risk-free bond and ... a risky bond.’ " In re Enron Corp. Sec. Derivative & "ERISA" Litig., 529 F.Supp.2d 644, 764 (S.D. Tex. 2006).18 A logarithm (or log) is the mathematical inverse of exponentiation: if x taken to the yth power equal......
-
Fair Equivalents and Market Prices: Bankruptcy Cramdown Interest Rates
...efficiency of stock markets, the studies on the informational efficiency of bond markets were quite limited until . . . 2002.").133. 529 F. Supp. 2d 644, 748 (S.D. Tex. 2006); see also Thomas S. Green, Comment, An Analysis of the Advantages of Non-Market Based Approaches for Determining Cha......
-
FRAUD ON THE CRYPTO MARKET.
...In re HealthSouth Corp. Sec. Litig., 261 F.R.D. 616, 621 (N.D. Ala. 2009); In re Enron Corp. Sec. Derivative & "ERISA" Litig., 529 F. Supp. 2d 644, 676 (S.D. Tex. 2006); In re DVI Inc. Sec. Litig., 249 F.R.D. 196, 216 (E.D. Pa. 2008). But see In re Am. Int'l Grp., Inc. Sec. Litig., 265 ......
-
The Inherent Ambiguity of Out-of-Pocket Damages in Securities Fraud Class Actions.
...value after the fraudulent behavior is revealed to the public can be used to demonstrate damages); see also In re Enron Corp., Sec., 529 F. Supp. 2d 644, 716 (S.D. Tex. 2006) (describing how the traditional approach for security fraud is to provide recovery equivalent to the difference betw......
-
Beyond "Market Transparency": Investor Disclosure and Corporate Governance.
...In re HealthSouth Corp. Sec. Litig., 261 F.R.D. 616,637 (N.D. Ala. 2009); In re Enron Corp. Sec. Derivative & "ERISA" Litig., 529 F. Supp. 2d 644, 756 (S.D. Tex. 2006); Serfaty v. Int'l Automated Sys., Inc., 180 F.R.D. 418,423 (D. Utah 1998) (finding that a small amount of institutional......