Litigation Department Successfully Represents Underwriters in Significant Securities Class Action.
Willkie successfully represented Goldman, Sachs & Co. and several other underwriters (J.P. Morgan Securities LLC; Stifel, Nicolaus & Company, Inc.; KeyBanc Capital Markets Inc.; RBC Capital Markets, LLC; and Jefferies & Company, Inc.) in the Francesca’s Holdings Corp. Securities Litigation. Francesca’s operates over 350 boutiques nationwide specializing in women’s apparel and accessories. Shortly after Francesca’s announced disappointing second quarter 2013 results, investors filed complaints alleging violations of the Securities Act of 1933 and the Securities Exchange Act of 1934. The complaints generally allege that the company made false and misleading statements and omitted information concerning its margins, same-store sales growth, promotional activity, and its relationships with certain suppliers and named as defendants the underwriters of various secondary offerings (totaling approximately $700 million) of Francesca’s stock.
Yesterday, the Court (Southern District of New York) dismissed all of Plaintiffs’ claims brought under the Securities Act of 1933 and Exchange Act of 1934. In finding Plaintiffs’ allegations to be “long on innuendo but extremely short on facts,” and “little more than an assumption-laden hunch,” the Court held that Plaintiffs failed to plead an actionable material misstatement or omission to sustain a claim under Section 11 and 12(a)(2). The Court noted that, “[n]eedless to say, more is required to bring claims under the United States securities laws” than a “hunch” “ascribing lukewarm financial results to a vague form of deceit in a theory that is itself full of gaps.” The Court also denied Plaintiffs the opportunity to amend their consolidated amended complaint.
The Willkie team representing the Underwriters includes partners Richard D. Bernstein and Todd G. Cosenza and associates Frank Scaduto, Zheyao Li and Jennifer Greene.