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.
Former MDC Partners Chief Accounting Officer Wins Dismissal of Securities Fraud Class Action
- Client News
- October 3, 2016
Judge Richard Sullivan of the Southern District of New York
dismissed a securities fraud class action complaint against Paul,
Weiss client Michael Sabatino. The complaint alleged that MDC
Partners, certain of its executives, including Mr. Sabatino, MDC's
chief accounting officer, and its audit committee chair made
material misstatements about goodwill, EBITDA, executive
perquisites and internal controls in the company's SEC filings.
With respect to Mr. Sabatino, the complaint alleged scienter based
on his stock trades, compensation scheme, and approval of the CEO's
expenses as well as the timing of his resignation. Judge Sullivan
ruled that the plaintiffs failed to plead a material misstatement
or omission and failed to plead scienter. He concluded that Mr.
Sabatino's stock trades were not suspiciously timed and appeared to
be for legitimate purposes, that compensation tied to corporate
performance was insufficient to allege motive to commit fraud, and
that neither Mr. Sabatino's corporate position nor his resignation
supported an inference of scienter.
The Paul, Weiss team included partners Daniel Kramer, James
Brochin and Audra Soloway.
