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Paul, Weiss is widely recognized as having one of the nation’s preeminent securities litigation and regulatory practices. For two decades, our lawyers have guided global corporations and financial institutions through a series of “bet-the-company” securities-related crises, consistently reducing or eliminating their most damaging claims and negotiating favorable resolutions.
Carnival Wins Dismissal of Securities Class Action
- Client News
- May 28, 2021
Paul, Weiss achieved a significant victory for Carnival Corp. & plc, the world’s largest cruise operator, and Carnival’s CEO, Arnold Donald, when the U.S. District Court for the Southern District of Florida granted a motion to dismiss a securities class action complaint alleging that defendants had defrauded investors in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5.
The complaint alleged that defendants made material misstatements and omissions concerning the risks posed to Carnival by COVID-19, and about the company’s commitments to regulatory compliance and health and safety. Chief U.S. District Judge Kevin Michael Moore agreed with defendants that the challenged statements and omissions were not materially false or misleading, including because Carnival’s SEC filings clearly and consistently disclosed the impact of the pandemic on the company’s operations and financials. The court also found that plaintiffs failed to plead a strong inference of scienter, in part because plaintiffs’ theory—that defendants possessed greater knowledge than the CDC or the WHO about the future course of the pandemic and appropriate safety precautions—was less compelling than non-fraudulent alternatives. The dismissal is without prejudice, and plaintiffs have 21 days to file an amended complaint.