Michael Lynn Discusses Harbinger Securities Case in Law360
As seen in Law360’s “Justices Seek SG's View On Harbinger Securities Row”
Law360 reports that the United States Supreme Court has asked for the views ofSolicitor General Donald B. Verrilli Jr. on the cert-worthiness of a petition seeking to overturn a Ninth Circuit decision that allowed David Hildes, a former director of Harbinger Corporation, to proceed with his suit against certain former directors of Peregrine Systems, Inc. Hildes lost approximately $25 million when his Harbinger stock was exchanged for Peregrine stock pursuant to a materially false registration statement issued by Peregrine. The former directors argue that the Ninth Circuit was wrong to allow Hildes to add a Section 11 claim under the Securities Act of 1933, citing the Eleventh Circuit's 2007 APA Excelsior decision and its narrow view of Section 11 as reason for their appeal.
Kaye Scholer litigator Michael Lynn, who represents Hildes, voiced the belief that the Supreme Court would ultimately decline to hear the case, pointing out that the Ninth Circuit had “clearly established that there was no conflict between its ruling and the Excelsior decision.” He added, "The view advanced by petitioners would undermine the purpose of the Securities Act, which is to protect investors like Mr. Hildes who suffer losses as a result of false and misleading securities disclosures.”