March 29, 2006
Firm successfully argues for dismissal of all claims brought against client Marsh & McLennan Companies, Inc. in MDL proceedings pending in the United States District Court for the District of Maryland.
The firm recently successfully argued for the dismissal of all claims brought against client Marsh & McLennan Companies, Inc. (“MMC”) in MDL proceedings (In re Mutual Funds Investment Litigation) pending in the United States District Court for the District of Maryland. This 10b-5 class action by shareholders of MMC claimed that they were damaged as a result of market timing activities engaged in by certain employees of Putnam, one of Marsh's subsidiaries. MMC, its former Chairman (Jeffrey Greenberg) and another MMC officer (Francis Bonsignore), were charged with making statements in MMC's public filings that, in light of market timing activities at Putnam, they knew or should have known were false and misleading. The Willkie team argued on a motion to dismiss that, as a matter of law, the statements made were not misleading and that plaintiffs could not show that MMC acted with the requisite scienter because the complaint itself pled that the market timing activities at Putnam were concealed from MMC by certain Putnam officers and directors. In granting the motion to dismiss, the Court found that plaintiffs could not show scienter because MMC “could not have known of (or recklessly blinded itself to) information that was concealed from it” and held that “as a matter of law, plaintiffs’ allegation of concealment negates the element of scienter.” The Court further held that since there were no underlying violations of Section 10(b), there could be no control person liability under Section 20(a). The case is being handled by partners Stephen Greiner and Jeanne Luboja, and associate Ian Hochman.