•     Judge Posner, writing for the Seventh Circuit Court of Appeals, affirmed the dismissal of a state court claim under SLUSA.  The complaint did not allege fraud but included claims of material misstatements or omissions.  These allegations were not purely incidental but were probably necessary for the action to succeed.  Dismissal with prejudice was appropriate to prevent any attempt to sneak the allegations back into the case at a later time.

•     The Ninth Circuit upheld the District Court’s decision to certify a class, finding that a plaintiff need not prove materiality at the class certification stage.  The Court of Appeals also held that a defendant cannot at the class certification stage attempt to establish the truth-on-the-market defense to defeat the fraud-on-the-market presumption of reliance.

•     Judge A. Wallace Tashima, writing for the Ninth Circuit Court of Appeals, affirmed in part and reversed in part a decision dismissing certain claims against McAfee, Inc. surrounding a stock options backdating scandal.   Kent Roberts, the former General Counsel of McAffee, alleged that McAfee maliciously prosecuted and defamed him in an attempt to deflect attention from large-scale backdating of stock options within the company.  The court held that Roberts failed to demonstrate that his claims had the requisite degree of merit to survive McAfee’s anti-SLAPP (Strategic Lawsuits Against Public Participation) motion, and Robert's claims for defamation and false light invasion of privacy were time-barred.

•     Judge Kane of the federal district court for the District of Colorado denied a motion to dismiss claims that mutual funds misrepresented the risk of certain investments, including inverse floaters.  The company failed to disclose information about risk, leverage, and liquidity.  Press reports did not trigger the statute of limitations as a matter of law.  Even though the interests were not traded on public markets, loss causation could be established by valuation.

•     Judge Cooper of the federal district court for the District of New Jersey granted a motion to dismiss claims by a former officer of a pharmaceutical company who exercised stock options.  He alleged that the company had misrepresented the date of the completion of clinical trials.  The court found that this information was not truly material and that the officer had unreasonably relied on projected completion times, given the defendants’ disclaimers.

•     Judge Stengel of the federal district court for the Eastern District of Pennsylvania granted a motion to dismiss numerous claims against the bank that managed auctions for auction rate securities.  The state securities act paralleled Rule 10(b)-5, and the plaintiffs could not show any duty to disclose to them, which would enable claims based on omissions.  Nor could they show scienter or loss causation.  The plaintiff was a sophisticated party that could not demonstrate reasonable reliance.  Common law claims were also dismissed for similar reasons.

•     Judge Engelmayer of the federal district court for the Southern District of New York held that securities fraud plaintiffs were required to disclose the identity of confidential witnesses in discovery.  The plaintiffs had relied heavily on the witnesses in the complaint, and their identity was certain to emerge eventually.  The work product doctrine did not protect against disclosure.  The plaintiff had not established a general risk of retribution upon disclosure but the court provided an opportunity to make such a showing.

•     Judge Dalzell of the federal district court for the District of Delaware granted a motion to dismiss a claim that a proxy failed to disclose important facts.  The facts were material, but the complaint had to show that the omission rendered it misleading.  The plaintiff could point to no statements made that rendered the omission misleading and a mere desire to know more information could not support the cause of action.