Optionable Shareholders Lose Bid To Revive Action

Optionable Shareholders Lose Bid To Revive Action - 6/15/2009

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HEADLINES \| SETTLEMENTS AND DISMISSALS \| COURT FILINGS LINKS TO OTHER NEWS \| NEWS ARCHIVE	HEADLINES ARCHIVED SETTLEMENTS AND DISMISSALS ARCHIVED

DISMISSAL NEWS:

Optionable Shareholders Lose Bid To Revive Action
Christine Caulfield

Securities Law 360. June 15, 2009
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EXCERPT: A federal judge has refused a bid by Optionable Inc. shareholders to reconsider — in the wake of criminal and regulatory actions against the brokerage firm's executives — an order dismissing a putative securities class action related to natural gas options. Issuing his order Monday, Judge Paul A. Crotty of the U.S. District Court for the Southern District of New York said this “newly discovered evidence” by the shareholders was not enough to reopen the case and allow for a second amended complaint. The plaintiffs' original complaint alleged that Optionable and five senior executives breached securities laws by scheming to misprice natural gas options in collaboration with a trader at Bank of Montreal, the company's biggest client. Judge Crotty's colleague Judge Lewis Kaplan granted Optionable's motion to dismiss the complaint on Sept. 15, 2008, for lack of proof of fraud. The plaintiffs were granted leave to amend the complaint by Oct. 6, but they instead sought a partial lifting of the stay on discovery in the case to examine a Deloitte & Touche LLP report on BMO they argued was crucial to their claims. Judge Kaplan denied the request on Oct. 20, 2008, saying he saw no merit to the motion, and ordered the clerk of the court to enter a final judgment of dismissal. A month later, the U.S. attorney for the Southern District of New York announced the filing of a six-count criminal indictment against Optionable CEO Kevin Cassidy over the pricing scheme. The announcement also revealed that the BMO trader at the center of the scheme, David Lee, had pled guilty to a four-count indictment. Other agencies to announce actions against the Optionable executives included the U.S. Securities and Exchange and the U.S. Commodity Futures Trading Commission.

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