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Securities Fraud Claim Dismissed for Retailer

March 27, 2014
Client Success


A publicly traded retailer client was sued for securities fraud under Section 10(b) and Rule 10b-5 of the Exchange Act. The claimant, one of the company’s suppliers, alleged that the company made false and misleading statements in connection with the sale of a security.


We filed a motion to dismiss the securities fraud claim, arguing that the arrangement between the two companies was not an investment contract and, therefore, was not a security within the meaning of the federal securities laws. The court agreed and dismissed the claim.