Diebold securities litigation dismissal upheld by Sixth Circuit
Client(s) Diebold, Incorporated
Jones Day represented Diebold and a group of its current and former officers and directors, which had been sued in a shareholder class action (dismissed and affirmed on appeal) under federal securities law for allegedly making false statements about the status and prospects of Diebold's businesses. Plaintiffs alleged that the defendants had engaged in a scheme to misrepresent the company's finances by prematurely recognizing revenues in a variety of ways. Jones Day filed a motion to dismiss, arguing that the alleged scheme was not supported by sufficiently particularized allegations, that the complaint did not give rise to a strong inference of scienter as to any of the defendants, and that the complaint did not adequately allege loss causation. After the announcement of an SEC investigation and of the company's intention to restate several years of its financial statements, the plaintiffs moved to amend their complaint, which motion we opposed. In August 2008, the court issued an opinion granting our motion to dismiss, finding that the complaint's scienter allegations were insufficient. It also denied the plaintiffs' motion to amend and entered judgment in favor of defendants on all the claims in the complaint. The plaintiffs appealed the district court's granting of our motion to dismiss, and on December 22, 2009, the U.S. Court of Appeals for the Sixth Circuit affirmed the dismissal.
In re Diebold, Inc. Securities Litigation No. 05-CV-2873 (N.D. Ohio 2005) aff'd, No. 08-4752 (6th Cir., Dec. 22, 2009)