Second Circuit – Securities Exchange Act: New England Carpenters Guaranteed Annuity and Pension Funds v. AmTrust

United States Court of Appeals for the Second Circuit

Securities Exchange Act — Misstatements — Statements of opinion

New England Carpenters Guaranteed Annuity and Pension Funds v. AmTrust

20-1407-cv

Judges Lohier, Nardini, and Kovner

Background: The plaintiffs, who are investors in the defendant, appealed from the dismissal of their Securities Exchange Act claims. The district court held that certain public misstatements relating to the defendant’s recognition of revenue generated by its extended warranty contracts and expenses associated with its payment of discretionary employee bonuses were non-actionable statements.

Ruling: The Second Circuit affirmed in part and vacated in part. The court held that most statements were not actionable, but found the claims against the defendant, its officers and directors, and the underwriter defendants related to the defendant’s reported income in its historical consolidated financial statements were actionable based on the erroneous accounting treatment related to bonus payments.

Andrew S. Love, of Robbins Geller Rudman & Dowd, for the plaintiffs-appellants; Steven M Farina, of Williams & Connolly, Timothy E. Hoefner, of McDermott Will & Emery, and Gregg L. Weiner, of Ropes & Gray for the defendants-appellees.