News & Events

On May 15, 2009, Judge Marsha Pechman of the United States District Court for the Western District of Washington dismissed without prejudice all securities fraud (’34 Act) claims against Simpson Thacher’s clients in the consolidated securities litigation arising out of the collapse of Washington Mutual, Inc. Adopting arguments advanced in our motion to dismiss, the Court noted that it found it “remarkable” that “Plaintiffs make no effort to connect a particular statement made by any defendant with allegations as to why that statement was false or misleading or with allegations of facts giving rise to a strong inference of scienter.” The Court’s ruling was critical of the sprawling, 400-page complaint filed by the Plaintiffs, finding that it “fail[s] to organize and identify the allegations supporting securities fraud as to each defendant, contain[s] no useful cross-references or paragraph citations to connect the relevant allegations, and appear[s] to include numerous irrelevant allegations, thereby depriving Defendants of proper notice of the grounds for the 10(b) claims against them.” In short, the Court warned that “[i]f Plaintiffs’ counsel are unable to rectify the problems identified in this Order when they file an amended complaint, the Court may be obligated to review whether counsel can adequately represent the proposed class.” The remaining claims (under the ’33 Act) were dismissed in part.

Plaintiffs have until June 15 to attempt to re-plead their claims. Judge Pechman’s ruling is the first substantive analysis of any of the claims arising from the collapse of Washington Mutual. The Simpson Thacher team was composed of partners Barry Ostrager and Mary Kay Vyskocil, and associates Rob Pfister, Gabe Miller, Nick Melzer, Jacob Press, Meghan Cannella and Peter Jordan.