Your wait is finally over. Yes, it took two years, but there has been a ruling on Defendants’ motion to dismiss the First Union securities class action. You see, the motion was originally filed back in Febraury 2004, but Judge H. Brent McKnight (W.D. N.C.), who was only 52 and had been an Article III Judge for only a year, tragically passed away on November 27, 2004, so Magistrate Judge Carl Horn, III stepped in to handle the case.
More time passed after Defendants asked to supplement the briefing in light of Dura, but their argument carried the day with Judge Horn, as he held that “assuming for purposes of this motion only that the Plaintiffs have adequately pled the other elements of their securities fraud claim, they have failed to establish causation for the losses that they suffered on First Union shares they purchased, that is, that the subsequent decrease in the First Union stock price was caused by the Defendants' misrepresentations concerning the Money Store and gain-on-sale accounting.” Thus, “applying the particularity pleading requirement to loss causation, the specific allegations of the Third Amended Complaint contradict the Plaintiffs' otherwise generalized allegations that they suffered an economic loss as a result of the alleged misrepresentations.”
You can read In re First Union, issued January 20, 2006, at 2006 U.S. Dist. LEXIS 5083.
Nugget: “The Plaintiffs clearly state that the stock price decline was caused by two public statements, the January and May 1999 revised earnings estimates, after which the First Union share price did fall, but they equally clearly allege that the Defendants did not disclose the ‘truth’ about the Money Store and gain-on-sale accounting until June 26, 2000.”