According to the complaint filed on September 24, 2010, throughout the Class Period, the defendants made false and misleading statements to Plaintiff and other Stewardship Fund investors because the audits performed, if any, were not in accordance with Generally Accepted Auditing Standards (“GAAS”) and, contrary to the claims of E&Y Bermuda and E&Y Bahamas, the Stewardship Fund’s financial statements were not in conformity with Generally Accepted Accounting Principles (“GAAP”).
As a result, investors such as Plaintiff and other members of the proposed Class were induced to invest, or to continue to invest, in the Stewardship Fund and thereby sustained damage.
On December 21, 2010, the Court appointed Terence Isakov as Lead Plaintiff and approves Mr. Isakov's selection of Shepherd, Finkelman, Miller & Shaw as Lead Counsel. On January 17, 2011, the Lead Plaintiff filed an Amended Class Action Complaint.
On March 14, 2011, the plaintiff filed a Stipulation of Dismissal, to dismiss defendant Ernst & Young LLP from the action. The next day, the motion was granted. The plaintiff must file a Second Amended Class Action Complaint no later than March 18, 2011. Defendants shall answer or otherwise respond to the Second Amended Class Action Complaint no later than April 1, 2011. The Second Amended Class Action Complaint was filed on March 18, 2011. A Third Amended Class Action Complaint was filed on May 2, 2011. On May 23, 2011, the defendants responded by filing a motion to dismiss. On November 21, 2011, the motion to dismiss was taken under advisement.
On March 19, 2012, the Court granted in part and denied in part defendant's Motion to Dismiss, or in the alternative, to Enforce Arbitration and Forum Selection Provisions. Because plaintiff failed to adequately plead scienter, his § 10(b) claim under the Exchange Act was dismissed. As the Court found that plaintiff's negligence and professional malpractice claims are derivative, they are governed by the arbitration agreement between the Fund and defendant. The Court therefore stayed consideration of plaintiff's negligence and professional malpractice claims pending the conclusion of arbitration. Any fraudulent inducement claim was dismissed, but plaintiff's negligent inducement claim survived. Plaintiff should submit a status report on or before April 20, 2012 to inform the Court as to whether he intends to submit
the negligent inducement claim to arbitration along with his "pure" negligence and professional malpractice claims.
On December 19, 2012, the parties entered a Stipulation of Dismissal into the court's docket, closing this case.