Shiloh Industries wins dismissal of securities fraud class-action lawsuit filed in aftermath of accounting restatement
Clients Shiloh Industries, Inc.
Jones Day won a dismissal of a securities class-action lawsuit, prior to any discovery taking place, against Shiloh Industries, Inc., its CEO, and CFO arising from an accounting restatement in 2015 that caused its stock price to plunge. Jones Day's motion to dismiss argued that the restatement was the result of misconduct by a single low-level accounting employee, and that that employee’s state of mind—or scienter—could not be attributed to the company, its CEO, or CFO for purposes of the federal securities laws. The court accepted the argument, issuing an important decision in a developing area of the law.
Thomas v. Shiloh Industries, Inc., et al., No. 1:15-cv-7449-KMW (S.D.N.Y.)