Thursday, October 26, 2006

The Wells Fargo Wagon

Judge William H. Alsup has partially denied the latest motion to dismiss in the Wells Fargo & Co. (NYSE: WFC) mutual funds litigation according to a press release issued today by lead counsel, Gutride Safier LLP.

A copy of Judge Alsup's October 24, 2006 opinion is available here, but as alluded to earlier, this is merely the latest motion to dismiss in the litigation, and a copy Judge Alsup's August 14, 2006 opinion also denying in part and granting in part the prior motion to dismiss is available here.

In the August 14 opinion, Judge Alsup held that the plaintiff had failed to allege that he had standing to bring his claim for violation of Section 36(b) of the Investment Company Act of 1940, and that there was no private right of action for violations of Section 48(a) of the ICA, and dismissed those claims.

Judge Alsup found however, that plaintiff had properly plead violations of the Securities Act of 1933 and the Securities Exchange Act of 1934 and denied the motions to dismiss those counts in the prior amended complaint.

In the latest opinion, Judge Alsup granted the motion to dismiss with respect to the claims alleged against H.D. Vest Investment Services, LLC, an affiliated, broker/dealer, non-bank subsidiary of Wells Fargo, due to standing issues.

Judge Alsup also dismissed the Section 10(b) claims alleged against the investment advisor and distributor defendants, holding that the plaintiff had not adequately plead that those defendants had made any statements or participated substantially enough in the alleged scheme to defraud.

A copy of the "Second Amended Consolidated Class Action Complaint For Violation Of The Federal Securities Laws And For Violation Of The Investment Company Act" (say that five times fast) is available here.

The plaintiff "may seek leave to amend by filing a motion proposing yet another complaint, to be filed and served by November 17, 2006," so yet another round of motions to dismiss will be "a-comin' down the street."

Daily Trivia: Judge Alsup is also a passionate outdoorsman, having spent considerable time exploring and helping to conserve the Sierra Nevada Mountains. Judge Alsup has even written a pair of books for the Yosemite Association, including Missing in the Minarets: The Search for Walter A. Starr, Jr., which details the mysterious 1933 disappearance of a prominent San Francisco attorney among the rugged peaks of the Sierra Nevada.

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