Atlantic Power Corporation Defeats Appeal of Dismissal of Securities Fraud Claims
October 21, 2015
On October 21, 2015, Cleary Gottlieb won denial of plaintiffs’ Rule 60(b)(2) motion seeking to vacate the District of Massachusetts’ March 13, 2015 Order dismissing their securities fraud claims against Atlantic Power Corporation, and certain of its current and former officers and directors, for failure to plead a strong inference of scienter. Atlantic Power owns and operates various power generation assets. The lead plaintiff, an investor in the company’s common stock, had alleged that defendants made fraudulent statements about the company’s debt and the sustainability of its dividend over a two-year period.
Plaintiffs had appealed the dismissal of their claims to the First Circuit. While that appeal was pending, plaintiffs filed with the District Court a Rule 60(b)(2) motion seeking to vacate the District Court’s dismissal of their claims on the basis of newly discovered evidence, which was contained in a Canadian court’s July 24, 2015 decision that dismissed a parallel securities fraud class action against Defendants under Canadian law. Specifically, the Canadian decision found that defendants had not made any misrepresentation regarding Atlantic Power’s dividend.
In denying the Rule 60(b) motion, U.S. District Judge Indira Talwani found that plaintiffs had mischaracterized the evidence described in the Canadian decision, and that Atlantic Power’s internal discussions did nothing to establish that defendants had acted with scienter.
In light of the District Court’s decision, plaintiffs have decided not to further prosecute their appeal before the First Circuit, and have stipulated to its withdrawal.