United States Seventh Circuit

In consolidated securities and ERISA class actions arising out of fraud at two of defendant's subsidiary publications, dismissal of both suits is affirmed where: 1) the securities complaint as a whole did not establish a strong inference of scienter as to most of the individual defendants; 2) one defendant who participated in a fraudulent scheme had no role in preparing or disseminating defendant's financial statements or press releases, and an indirect chain to the contents of false public statements is too remote to establish primary liability; 3) the alleged misconduct was not imputable to defendant by the doctrine of respondeat superior; 4) the district court did not abuse its discretion in denying plaintiffs' motion for leave to amend; 5) the facts alleged do not support that the ERISA fiduciaries should have been aware of obvious control deficiencies, thus no duty to investigate was triggered; and 6) the fiduciaries were not negligent in the allegedly inaccurate statements they made to plan participants.

Appellate Information

• Argued 01/23/2008
• Decided 04/02/2008
• Published 04/02/2008

Judges

• EVANS, Circuit Judge., Before MANION, ROVNER, and EVANS, Circuit Judges.

Court

• United States Seventh Circuit

Counsel

• For Appellant:
  
• Edwin J. Mills (argued), Stull, Stull & Brody, New York, NY, Sherrie R. Savett (argued), Douglas M. Risen, Berger & Montague, Philadelphia, PA, Leigh R. Handelman, Pomerantz, Haudek, Block, Grossman & Gross, Chicago, IL, for Plaintiffs-Appellants.


• For Appellees:
  
• David F. Graham (argued), Sidley Austin, Chicago, IL, Craig C. Martin, Jenner & Block, Chicago, IL, Steven A. Miller, Reed Smith, Chicago, IL, Judd Burstein, New York, NY, Brendan J. Healey, Mandell & Menkes, Chicago, IL, for Defendants-Appellees.