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Clark Smith Villazor Obtains Dismissal of Client from Federal Securities Class Action

February 27, 2024

On February 6, 2024, Jeffrey Rotenberg and Michael Sala of Clark Smith Villazor LLP secured the dismissal of CSV’s client in a federal securities class action pending in the United States District Court for the Southern District of New York relating to, where our client had served as Chief Legal Officer and Chief Operating Officer.  The complaint named, various former members of’s management, and individuals associated with a special purpose acquisition company (“SPAC”) that merged with as defendants.  Plaintiffs alleged that defendants misrepresented’s compliance with state and federal laws;’s financial information before and after the SPAC merger; and’s internal controls concerning financial reporting.  Our motion argued that plaintiffs had not met their burden to adequately plead (1) any actionable false statement; (2) that our client was the maker of any allegedly false statements; (3) that our client acted with the requisite scienter; or (4) that our client was a statutory control person.

 Following briefing and oral argument, Judge Rochon issued the opinion granting our motion to dismiss and granting plaintiffs leave to amend the complaint.  The Court’s decision agreed with our arguments that plaintiffs had not adequately pleaded scienter as to our client (and thus declined to reach all our additional arguments).  Plaintiffs filed an amended complaint on February 27, 2024, but elected to drop our client as a defendant, terminating the case against her.

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