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In re Parmalat Sec. Litig.

In re Parmalat Sec. Litig.

United States District Court for the Southern District of New York

July 13, 2005, Decided ; July 13, 2005, Filed

MASTER DOCKET 04 MD 1653 (LAK)

Opinion

 [*479] Table of Contents

I. The Complaint and the Motions to Dismiss

A. Citigroup

1. Factual Allegations

a. Securitization of Invoices

b. The Geslat / Buconero Arrangement

c. Parmalat Canada Arrangement

2. Causes of Action, Grounds [**2]  for Motion to Dismiss

B. Bank of America

1. Factual Allegations

a. The Parmalat Administracao Private Placement

b. Loans Backed by Funds Raised Through Private Placements

2. Causes of Action, Grounds for Motions to Dismiss

C. Banca Nazionale del Lavoro

1. Factual Allegations

2. Causes of Action, Grounds for Motion to Dismiss

D. Credit Suisse First Boston

1. Factual Allegations

2. Cause of Action, Grounds for Motion to Dismiss

II. 12(b)(6) Motions to Dismiss

III. Pleading a Violation of Rule 10b-5

A. Scienter

B. Rule 10b-5(b): Misrepresentations and Omissions

C. Rule 10b-5(a) and (c): Deceptive and Manipulative Acts and Devices

IV. Primary Liability Versus Liability for Aiding and Abetting

A. Rule 10b-5 Liability for Outside Financial Institutions Prior to Central Bank

1. Confusion Between Primary and Aiding and Abetting Liability

2. Aiding and Abetting Liability for Lenders that Facilitate Fraud

3. Most Cases Did Not Focus on the Distinction Among the Subsections of Rule 10b-5

B. The Central Bank Decision

C. Liability for Outside Financial Institutions After Central Bank

V. Sufficiency [**3]  of the Section 10(b) Claims

A. Allegations Regarding Structuring and Participating in Transactions

1. Violation of Rule 10b-5(a) and (c)

a. Securitization and Factoring of Invoices

 [*480] b. Other Transactions that Resulted in Mischaracterization of Debt

c. The CSFB Transactions

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376 F. Supp. 2d 472 *; 2005 U.S. Dist. LEXIS 14542 **

In re PARMALAT SECURITIES LITIGATION; This document relates to: 04 Civ. 0030

Subsequent History: As Amended, August 11, 2005.

Count dismissed at  Bondi v. Grant Thornton Int'l (In re Parmalat Sec. Litig.), 377 F. Supp. 2d 390, 2005 U.S. Dist. LEXIS 14103 (S.D.N.Y., July 14, 2005)

Prior History:  In re Parmalat Sec. Litig., 376 F. Supp. 2d 449, 2005 U.S. Dist. LEXIS 13857 (S.D.N.Y., July 12, 2005)

Disposition: One domestic bank's motion was denied as to the transactions involving allegedly worthless invoices and otherwise granted. Another domestic bank's motion was granted in total. The foreign banks' motions were granted to the extent that the complaint asserted claims on behalf of purchasers of the securities not resident in the United States and otherwise denied.

CORE TERMS

transactions, invoices, allegations, deceptive, omissions, aiding and abetting, violations, misrepresentations, banks, manipulative, loans, misleading, investors, securitization, participated, misstatements, subsidiary, cause of action, press release, causation, motion to dismiss, financing, scienter, contrivance, factoring, private placement, fraudulent, customers, entities, euro

Securities Law, Securities Exchange Act of 1934 Actions, Implied Private Rights of Action, Deceptive & Manipulative Devices, Blue Sky Laws, Offers & Sales, Civil Liability, Fraudulent Interstate Transactions, General Overview, Civil Procedure, Defenses, Demurrers & Objections, Motions to Dismiss, Failure to State Claim, Dismissal, Involuntary Dismissals, Failure to State Claims, Criminal Law & Procedure, Fraud, Securities Fraud, Elements, Pleadings, Heightened Pleading Requirements, Civil Liability Considerations, Securities Litigation Reform & Standards, Elements of Proof, Express Liabilities, Misleading Statements, Fraud Claims, Securities Act Actions, Secondary Liability, Aiding & Abetting, Elements of Proof, Private Rights of Action, Banking Law, Banking & Finance, Federal Acts, Securities Exchange Act, Primary & Secondary Liability, Governments, Legislation, Interpretation, Commercial Banks, Mergers & Consolidations, Contracts Law, Consideration, Enforcement of Promises, Evidence, Burdens of Proof, Inferences & Presumptions, Trials, Jury Trials, Province of Court & Jury, Reliance, Causation, International Law, Authority to Regulate, Securities, International Trade Law, Dispute Resolution, Subject Matter Jurisdiction, Postoffering & Secondary Distributions, Federal Jurisdiction, Jurisdiction Over Actions, Controlling Persons, Complaints, Requirements for Complaint, Pleading & Practice, Rule Application & Interpretation