Ohio Securities Fraud Case Reinstated by Federal Court of Appeals
On Wednesday May 25, 2011, the 6th Circuit United States Court of Appeals reversed a decision made by a United States District Court in Toledo. In 2007, the lower court had dismissed a class action securities fraud lawsuit against the Maumee, Ohio firm Dana Holding Corporation, its former Chief Executive Michael Burns, and its former Finance Chief Robert Richter because it found that the plaintiffs did not show that the Dana Holding Corporation, Mr. Burns, and Mr. Richter most likely acted with knowledge of wrongdoing.The plaintiffs were shareholders and pension fund holders who alleged that both Mr. Burns and Mr. Richter made false statements regarding the financial health of the company. They filed their lawsuit in October 2005 alleging that the defendants knowingly misled investors regarding the company's financial performance. In 2006, Dana Holding Corporation was being investigated by the Securities & Exchange Commission and filed for bankruptcy protection.
The 6th Circuit Court of Appeals in Cincinnati reversed the lower court decision and found that the plaintiffs showed a "strong inference" that the defendants may have acted with the intent to mislead investors. The case will now go back to the District Court for further proceedings.
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