Court Denies Motion to Dismiss in In Re Eletrobras Securities Litigation

In re Eletrobras Securities Litigation, 15-cv-5754-JGK (S.D.N.Y.).  On Monday, March 27, 2017, the Hon. John G. Koeltl of the United States District Court for the Southern District of New York entered an Opinion and Order denying certain defendants’ motion to dismiss.  This matter involves one of the largest kickback corruption schemes in Brazilian history.  The complaint alleges that defendants made materially false and misleading statements to investors concerning the award of contracts for multi-billion dollar construction projects controlled by Eletrobras and its subsidiaries.  In his opinion, Judge Koeltl determined that lead plaintiffs had standing to assert claims on behalf of investors who had purchased either American Depositary Shares, bonds or both during the Class Period.  The Court also held that lead plaintiffs had stated facts with sufficient particularity to successfully allege that certain defendants had violated Section 10(b), Rule 10b-5, and Section 20(a) of the Securities Exchange Act of 1934, including sustaining a claim for scheme liability against the Company.

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