April 19, 2012
Firm Obtains Victory for 26 Underwriters in Multibillion-Dollar GE Securities Litigation
Richard D. Bernstein
, Mei Lin Kwan-Gett
On April 18, the U.S. District Court for the Southern District of New York issued an opinion and order in In Re: General Electric Company Securities Litigation, granting reconsideration and dismissing all claims against all 26 underwriters, which were represented by Willkie. Judge Denise Cote dismissed all remaining claims brought under the Securities Act of 1933.
The lawsuit was initiated in 2009 by the State Universities Retirement System of Illinois, the lead plaintiff, alleging that GE and the financial firms were responsible for investor losses during a six-month period when GE's stock price fell to about $10 from about $26. The plaintiffs alleged that GE withheld information regarding its financial health, including exposures to subprime and other low quality loans.
Judge Cote’s ruling noted that a previous decision by now retired Judge Richard Holwell in January had improperly relied on statements that weren’t incorporated in the offering documents for GE’s October 2008 $12 billion secondary offering. Judge Cote ruled that, pursuant to SEC Rule 412, earlier statements were superseded by the offering documents, that other statements by GE and its chairman Jeff Immelt were inactionable opinion, and that allegations about unquantified amounts of reclassified assets were immaterial.
The case was handled by partners Richard Bernstein and Mei Lin Kwan-Gett, and associates Zheyao Li, James Fitzmaurice, Jennifer Greene and Ross Wilson.