On Friday, Southern District Judge Naomi Reice Buchwald (See Profile) in Manhattan dismissed a putative class action accusing Magna International Inc. and current and former executives of committing securities fraud. In a 65-page opinion, she wrote that the amended complaint filed by attorneys at Robbins Geller Rudman & Dowd "border[ed] on the absurd."
The plaintiffs had accused automotive supplier Magna of downplaying problems at four of the company's European facilities. Magna's common stock traded at artificially inflated prices as high as $59.99 per share in January 2011 before plummeting to $39.42 in August 2011 after those problems were made public, the complaint maintained. Plaintiffs also claimed that Magna founder and former chairman Frank Stronach sold more than $900 million of his Magna shares while knowing of these undisclosed problems. The lead plaintiff was the City of Taylor General Employees Retirement System.
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