Rand-Heart of New York, Inc. v. Dolan

by
Rand-Heart filed a putative class action on behalf of purchasers of Dolan Company's securities under Sections 10(b) and 20(a) of the Securities Exchange Act, 15 U.S.C. 78j(b), 78t(a). The district court dismissed the complaint for failure to state a claim. The court concluded that the district court erred in dismissing the section 10(b) and Rule 10b-5 claim and thus erred in dismissing the secondary liability claim under section 20(a). In this case, taking the allegations as true, DiscoverReady's financial instability caused by the decline in Bank of America was, at the least, so obvious that defendant must have been aware of it. Further, defendant's statements about "double-digit" growth and "lumpiness" are not protected by the Act's safe-harbor provision where these statements are not meaningfully cautionary and they are not company-specific warnings. Finally, the district court did not err in finding no loss-causation for the time period at issue. The court affirmed in part, reversed in part, and remanded for further proceedings. View "Rand-Heart of New York, Inc. v. Dolan" on Justia Law