Loreley Financing (Jersey) No. 3 Ltd., et al. v. Wells Fargo Securities, LLC, et al.

Loreley Financing (Jersey) No. 3 v. Wells Fargo Securities, LLC, No. 13-CV-1476 Slip Op. (2d Cir. July 24, 2015)
The Circuit Court held that the district court erred in aspects of its dismissal under Rule 12(b)(6). The court found that (1) Plaintiffs' identification of the group defendants suffices to meet particularity requirements of Rule 9(b); (2) the allegations are sufficiently particular to show material misrepresentations and omissions with respect to certain defendants; (3) the allegations sufficiently showed loss causation. The Circuit Court also held that the district court exceeded its discretion in denying plaintiffs' request for leave to replead.
Procedural context:
Appeal from district court decision dismissing complaint with prejudice for failure to state a claim.
Plaintiffs invested millions of dollars in 2006-2007 in collateralized debt obligations structured, marketed, and managed by the defendants. When these notes became worthless in the financial crisis, plaintiffs sued the defendants for, among other things, fraud in the disclosures in the offering materials.
Leval, Calabresi, Lynch

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