Paul, Weiss is widely recognized as having one of the nation’s preeminent securities litigation and regulatory practices. For two decades, our lawyers have guided global corporations and financial institutions through a series of “bet-the-company” securities-related crises, consistently reducing or eliminating their most damaging claims and negotiating favorable resolutions.
Amazon Wins Dismissal of Securities Class Action
- Client News
- December 4, 2023
Practices
Paul, Weiss achieved a significant victory for Amazon.com, Inc., and several current and former executives, including Executive Chairman Jeff Bezos and CEO Andrew Jassy, when the U.S. District Court for the Western District of Washington granted our motion to dismiss a putative securities class action alleging that the defendants had defrauded investors in connection with statements made about Amazon’s relationship with third-party sellers and about the pace of growth in Amazon’s fulfillment distribution network.
The plaintiffs brought securities fraud claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and SEC Rule 10b-5 based on two separate alleged frauds. The plaintiffs claimed that the defendants made misrepresentations about Amazon’s alleged anticompetitive practices vis-à-vis third-party sellers, and about anticipated demand for items in Amazon’s store and fulfillment capacity expansion. The defendants moved to dismiss both fraud theories.
U.S. District Judge John C. Chun agreed with the defendants that the plaintiffs failed to plead a strong inference of scienter, noting that the plaintiffs’ theory for why the defendants would have concealed their allegedly anticompetitive practices concerning third-party sellers “does not make sense,” and that the plaintiffs were unable to allege that the defendants profited from the loss relating to overbuilding capacity or that they benefited at the expense of investors. As the court noted, the plaintiffs failed to allege that any “speaker was contemporaneously aware that [their] statement was false” and identified no meetings or calls involving any individual defendants, and no documents provided to them, with contemporaneous information that would have contradicted any challenged statement. The dismissal is without prejudice, and the plaintiffs have until January 16 to file an amended complaint.
The Paul, Weiss team included litigation partners Daniel Kramer and Audra Soloway and partner-elect Martha Goodman.