Fenwick & West securities litigation partner Jennifer Bretan and her legal team were credited in The Recorder with helping win a dismissal of a securities lawsuit filed by stockholders against Immersion Corp., initiated when Immersion made public that it had launched an internal investigation precipitated by an accounting irregularity, which plaintiffs blamed for causing a decline in the stock price.
When the suit was filed, Immersion General Counsel Anne Marie Peters turned to Fenwick for assistance, The Recorder reported. A federal judge dismissed the case in 2011, and the ruling was affirmed last summer by the U.S. Court of Appeals for the Ninth Circuit.
In upholding the lower court ruling, the court declared that while disclosure of an investigation is certainly “ominous,” any stock sell-off “can only be attributed to market speculation about whether fraud has occurred.”
It was the first time, The Recorder reported, that the Ninth Circuit ruled that the mere announcing of an internal investigation wasn’t sufficient grounds for a lawsuit by shareholders.
The ruling was truly significant, Bretan is quoted as saying, because "I don't think I've seen a securities case that doesn't cite that decision in terms of loss causation, so it really was a stellar result not just for Immersion but for any company facing an internal investigation."
Bretan also gave kudos to Peters for her handling of the whole matter, beginning with the investigation itself. "It really takes, I think, a special personality to effectively weather that storm [and] keep everything on an even keel," she said.
The Fenwick team representing Immersion included Susan Muck, Felix Lee, Jennifer Bretan and Marie Bafus. Bretan argued the appeal during oral argument.
The full article is available through The Recorder website (subscription required).