Salomon Smith Barney, Inc. ("Salomon" or the Company) is an investment bank.
The original Complaint alleges that Salomon and Grubman violated the federal securities laws by knowingly issuing false and misleading analyst reports regarding Winstar during the Class Period. The Complaint alleges that Defendants failed to disclose a significant conflict of interest between their investment banking and research departments. Specifically, the Complaint alleges that Salomon and Grubman issued very favorable analyst reports regarding Winstar to the public when they allegedly knew that the positive recommendations were unwarranted and false. The Complaint further alleges that, unbeknownst to the investing public, Salomon's buy recommendations and price targets for Winstar were driven by its efforts to attract lucrative investment banking business rather than by Winstar's fundamental merits.
On January 31, 2003, the Court entered the Order consolidating several actions that were filed on behalf of purchasers of the common stock of Winstar Communications, Inc., under In re Salomon Analyst Winstar Litigation, 02-CV-6171 (BSJ). On October 15, 2003, and Amended Complaint was filed, and on December 23, 2003, the Defendants responded by filing a motion to dismiss the Amended Complaint. On January 12, 2005, the Court entered the Opinion and Order #91092, signed by U.S. District Judge Gerard E. Lynch, granting the Defendants’ motion to dismiss the Amended Complaint with prejudice. On January 21, 2005, the lead Plaintiffs filed a motion for reconsideration of the Court’s Opinion and Order.
According to the Opinion and Order entered on March 1, 2006, in light of a decision from the Second Circuit issued after this Court's original order, see Lentell v. Merrill Lynch & Co., 396 F.3d 161 (2d Cir.2005), the motion to reconsider the dismissal of Plaintiffs' claims will be granted. Upon reconsideration, however, the Court will again grant Defendants' motion to dismiss. Plaintiffs' motion for leave to amend the Complaint will be denied.
