February 11, 2021
On February 10, 2021, Weil won a complete victory in a putative securities class action brought against national retailer Ollie’s Bargain Outlet Holdings, Inc. and several of its executives in the U.S. District Court for the Southern District of New York. The court granted the dismissal of all claims brought pursuant to Sections 10(b) and 20(a) of the Securities Exchange Act, which arose out of statements the defendants made about sales projections and Ollie’s inventory pipeline following a major corporate expansion, and closed the case.
In its opinion granting the defendants’ motion to dismiss, the court, in agreement with Weil’s arguments, found that the plaintiffs failed to adequately plead fraudulent intent. Specifically, the court held that the plaintiffs’ arguments did not show that the defendants benefited in any way from the purported fraudulent statements, and indeed underscored the fact that the majority of the individual defendants were “harmed by the fraud they purportedly orchestrated, undermining any fraud theory.” The court also found the plaintiffs’ theories about the defendants’ motives to perpetrate the alleged fraud amounted to nothing more than an alleged desire to maintain the appearance of profitability, which is possessed by “virtually all corporate insiders.” Finally, the court found the plaintiffs’ purported evidence, mainly statements of so-called confidential witnesses, failed to show conscious recklessness on the part of the defendants.
The Weil team included Jonathan Polkes, Co-Chair of Weil’s Litigation Department, Securities Litigation partner Stacy Nettleton, counsel Justin D’Aloia, and associates Irisa Chen, Jennifer Lau and Amama Rasani.