Law360 Quotes Lawrence Steckman on Rule 10b-5 Class Suit

  • September 25, 2013 – Law360 quoted EVW partner Lawrence Steckman regarding the dismissal of a Rule 10b-5 class suit against his client, an auditor firm that audited a Chinese natural gas company. Plaintiffs alleged audit reports contained misrepresentations because they did not reflect the nature of loans indirectly made to an officer’s relatives. Plaintiffs claimed the auditor committed securities fraud by opining that its audit complied with PCAOB standards and that company financial statements were in accord with GAAP, but not identifying the related party nature of the loans or as subsequent material events. Judge Rakoff held plaintiffs failed to properly plead facts showing Rule 10b-5 scienter and that their allegations failed to make out a plausible case that the auditor subjectively believed its audit opinion was false.