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