9th Circ. Weighs VW Bid To Reset Bondholder Fraud Standard

Law360 (January 12, 2021, 8:48 PM EST) -- A Ninth Circuit panel on Tuesday questioned whether Volkswagen had a fiduciary duty to disclose its emissions-cheating scandal when it sold bonds to institutional investors in 2014, as the appeals court weighs how to clarify a key reliance standard in securities fraud cases.

During oral arguments conducted via videoconference, Volkswagen's attorney Bob Giuffra of Sullivan & Cromwell told a three-judge panel that U.S. District Judge Charles Breyer in 2019 erroneously expanded the reliance standard set by the U.S. Supreme Court's 1972 Affiliated Ute decision in a long-running suit from the Puerto Rico Government Employees and Judiciary Retirement Systems Administration. Affiliated Ute...

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