Friday, April 23, 2010

Iqbal and the SEC's Case Against Goldman Sachs

As covered earlier here, an SEC civil action against defendants who were allegedly involved in the Bernie Madoff ponzi scheme was recently dismissed for failing to satisfy federal pleading standards. (See SEC v. Cohmad Securities Corp., No. 09-CV-5680, 2010 WL 363844, 2010 U.S. Dist. LEXIS 8597.)

Over at The Conglomerate, Prof. Christine Hurt (Illinois) asks whether this week's SEC action against Goldman Sachs might meet a similar fate. Noting the Cohmad court's reliance on Iqbal, she writes:

"[W]e always thought the SEC had it easier than private plaintiffs because it could bring actions against aiders and abetters and didn't have to deal with pleading requirements of the PSLRA. I guess Iqbal somehow levels that playing field, although possibly not in the right direction.

"The Cohmad case seemed to be the easiest case to bring, and maybe it would have been for the DOJ, who operates under different and sometimes easier rules for securities cases than civil rules. Judge Stanton did dismiss without prejudice with leave to replead for 30 days, but that deadline passed over a month ago.

"So, will the Goldman complaint survive the inevitable Motion to Dismiss?"

We'll find out soon enough. No doubt the attorneys for Goldman Sachs and Fabrice Tourre are preparing their 12(b)(6) motions as we speak.

--A

http://lawprofessors.typepad.com/civpro/2010/04/iqbal-and-the-secs-case-against-goldman-sachs.html

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