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Liability in Securities Offerings

Liability in Securities Offerings. Underwriter and accountant due diligence. Last updated 06 Feb 12. Securities Class Action. Investors. Plaintiffs Defendants Claims ’33 Act § 11 ’34 Act Rule 10b-5 Defenses. Montgomery Securities PaineWebber (lead underwriters).

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Liability in Securities Offerings

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  1. Liability in Securities Offerings Underwriter and accountant due diligence Last updated 06 Feb 12

  2. Securities Class Action Investors • Plaintiffs • Defendants • Claims • ’33 Act § 11 • ’34 Act Rule 10b-5 • Defenses Montgomery Securities PaineWebber (lead underwriters) Software Toolworks (Issuer) Deloitte & Touche (auditor) Directors Officers

  3. Prospectus Issuer – strict Ds / Os / UWs – due diligence defense (reasonable investigation + reasonable belief true) Auditor (expert) – no liability Financials Issuer – strict Ds / Os / UWs – not believe false Auditor (expert) – due diligence defense (reasonable investigation + reasonable belief true) Section 11 Liability(’33 Act)

  4. Securities fraud Material misrepresentation Scienter (actual knowledge or reckless disregard) Reliance Causation Damages Rule 10b-5 (’34 Act)

  5. Securities Class Action • Underwriters (Montgomery Securities and PaineWebber) • granted summary judgment on Section11 and Rule 10b-5 • what does this mean? • What do plaintiffs appeal? • Accountant (Deloitte & Touche) • granted summary judgment on Section 11 and 10b-5 • What do plaintiffs appeal? • Why don’t plaintiffs appeal Section 11 judgment for defendants? Investors Montgomery Securities PaineWebber (lead underwriters) Software Toolworks (Issuer) Deloitte & Touche (auditor) Directors Officers

  6. Underwriter defense …

  7. Auditor defense …

  8. The end(mercifully)

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