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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.
Second Circuit Affirms Dismissal of Securities Fraud Class Action Against lululemon and Founder
- Client News
- May 15, 2015
The Second Circuit affirmed the dismissal of a putative securities fraud class action brought against yoga apparel company lululemon athletica inc., its former CEO, Christine Day, and its founder and former chairman of the board of directors, Paul, Weiss client Dennis "Chip" Wilson.
In a brief summary order issued only one week after oral
argument, the Second Circuit affirmed an April 2014 opinion by
District Judge Katherine B. Forrest dismissing claims that the
defendants had defrauded lululemon shareholders by failing to
reveal shortcomings in the Company's quality control procedures
that caused certain of its yoga pants to become sheer when worn.
The Second Circuit found that the plaintiff's arguments on appeal
failed to undermine Judge Forrest's ruling that it had not
adequately pled any material misrepresentations or omissions, and
therefore could not state a claim under Sections 10(b) or 20(a) of
the Securities Exchange Act. "Insofar as the defendants are alleged
to have omitted information from Lululemon's corporate website,
filings with the SEC, press releases, or investor calls," the court
wrote, "the [plaintiff] has failed adequately to plead with
particularity that these omissions rendered the defendants'
statements inaccurate, incomplete, or misleading or that the
defendants were otherwise under a duty to disclose such
information." The court dismissed plaintiff's remaining
arguments as without merit.
The Paul, Weiss team included litigation partners Audra Soloway, who argued the appeal on behalf of Wilson, and Michele Hirshman.