Press Release
| February 14, 2012
Court Dismisses Federal Securities Class Action Against Omnicare
(NEW YORK – February 14, 2012) – Dewey & LeBoeuf recently secured the dismissal of a federal securities class action against Firm client Omnicare, Inc. The operative complaint, filed on behalf of a putative class of all purchasers of Omnicare stock pursuant to a 2005 public offering, asserted a claim under Section 11 of the Securities Act of 1933 based on alleged misstatements and omissions contained in the registration statement that Omnicare issued in connection with the offering. Specifically, the plaintiffs alleged: (1) that the financial statements included in the registration statement overstated Omnicare's earnings in violation of GAAP; and (2) that the registration statement also contained material misstatements concerning Omnicare's belief that its contracts with drug manufacturers and other business practices complied with applicable federal and state healthcare laws.
On February 13, 2012, Judge William O. Bertelsman of the United States District Court for the Eastern District of Kentucky entered an order dismissing the operative complaint in its entirety and striking the case from the docket. The court held that the plaintiffs failed to plead with particularity, as required by Federal Rule of Civil Procedure 9(b), any actionable misstatement or omission, a threshold element of a Section 11 claim. Plaintiffs had previously asserted a claim under Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. That claim was dismissed in 2007 and its dismissal was affirmed by the Sixth Circuit Court of Appeals in 2009.
The D&L litigation team working on the matter was headed by New York partners Harvey Kurzweil (who argued the motion to dismiss) and Dick Reinthaler and Los Angeles partner John Schreiber and included Los Angeles associates Mindy Yu and Daniel Ballon. U.S. Litigation Co-Chair Jim Smith also provided valuable assistance and input on the matter.
This memorandum is intended only as a general discussion of these issues. It is not considered to be legal advice. We would be pleased to provide additional details or advice about specific situations. For additional information on this important topic, please feel free to call upon your Dewey & LeBoeuf relationship partner. No part of this publication may be reproduced, in whole or in part, in any form, without our prior written consent.
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