In an opinion today, Judge Oetken allowed portions of securities class action against the asset management firm Och-Ziff Capital Management to proceed past a motion to dismiss.  Och-Ziff had said in a series of public filings: “We are not currently subject to any pending regulatory, administrative or arbitration proceedings that we expect to have a material impact on our results of operations or financial condition.”  In an amended 10-K following a Wall Street Journal story, however, the company admitted that the DOJ and SEC had been investigating potential FCPA violations and that an “adverse outcome could have a material effect on our business, financial condition or results of operations.”

Judge Oetken concluded that these facts amounted to a “plausible” claim of securities fraud because the company chose to speak on the subject of government investigations, but did so in an incomplete and inaccurate manner:
Continue Reading Judge Oetken Denies Motion to Dismiss Securities Case Accusing Och-Ziff of Incomplete Statements Regarding Government Investigations