Yesterday, Judge Rakoff sanctioned an attorney for an objector to the $3 billion Petrobras securities litigation settlement (see our full coverage of the Petrobras litigation here).  Judge Rakoff had approved the settlement over the objections, after which the objectors filed an appeal.  According to the class plaintiff, the appeals were part of an “extortionist agenda” to extract a monetary settlement in exchange for dismissing their appeals.

Judge Rakoff warned against the rise of frivolous objections to class settlements:
Continue Reading Judge Rakoff Grants Sanctions for “Objector Extortion” in Proposed Class Action Settlement

Last week, Judge Rakoff denied a request from the defendants in a group of Petrobras securities cases to stay a September trial date pending the Second Circuit’s consideration of an interlocutory appeal of class certification.  The defendants argued that the Second Circuit appeal was on an expedited schedule, and that significant expense could be saved in the event the case had to be re-tried.  The plaintiffs opposed the stay, arguing that a delay amid Brazilian political upheaval (including issues of Petrobras’ viability) would only serve to prejudice the plaintiffs.
Continue Reading Judge Rakoff Won’t Stay Petrobras Securities Trial, Calls Delay “Bane” of U.S. Legal System

Last week, Judge Rakoff granted Pricewaterhouse Coopers’ motion to dismiss Section 10(b) claims brought as part of the ongoing class action over an alleged bribery and kickback scheme at Brazilian oil giant Petrobras.  PwC’s Brazilian member firm had served as Petrobras’ independent auditor.  PwC argued that the fourth amended complaint had failed to properly allege scienter, and Judge Rakoff agreed, noting that “mere receipt of compensation and the maintenance of a profitable professional business relationship for auditing services does not constitute a sufficient motive for purposes of pleading scienter.”  Plaintiffs also failed to allege any facts connecting PwC’s auditing services to “red flags” of fraud at Petrobras.
Continue Reading Judge Rakoff Dismisses 10(b) Claims Against PwC for Alleged Petrobras Bribery Scheme, But Allows Section 11 Claims to Proceed Despite Omnicare