Simmonds v. Credit Suisse Secs. (USA) LLC, No. 09-35262

Dismissal of Short-Swing Trading Action Affirmed in Part

In Simmonds v. Credit Suisse Secs. (USA) LLC, No. 09-35262, an action alleging that the defendant-appellee investment banks violated Section 16(b) of the Securities Exchange Act of 1934 by engaging in prohibited "short-swing" transactions in connection with the Initial Public Offerings (IPOs) of the fifty-four defendant corporations between 1999 and 2000, the court affirmed the dismissal of the complaint in part where plaintiff failed to present an adequate demand letter to the issuing companies prior to filing her lawsuits.  The court reversed in part where Section 16(b)'s two-year statute of limitations began to run from the time that the defendant filed a Section 16(a) disclosure statement, and plaintiff alleged that such statements were never filed.

As the court wrote:  "Plaintiff-Appellant Vanessa Simmonds appeals the district court's dismissal of fifty-four related derivative complaints brought under Section 16(b) of the Securities Exchange Act of 1934 (Exchange Act), 15 U.S.C. § 78p(b). Simmonds's complaints allege that the Defendant-Appellee investment banks (collectively, Underwriters) violated Section 16(b) by engaging in prohibited "short-swing" transactions in connection with the Initial Public Offerings (IPOs) of the fifty-four Defendant-Appellee corporations (collectively, Issuing Companies) between 1999 and 2000. Simmonds seeks disgorgement of the Underwriters' alleged short-swing trading profits."

Related Resources

• Read the Ninth Circuit's Decision in Simmonds v. Credit Suisse Secs. (USA) LLC, No. 09-35262