Second Circuit Affirms Win for Liberty Tax and Former Officers

On September 30, the U.S. Court of Appeals for the Second Circuit affirmed the dismissal of a putative class action asserting claims under Section 10(b) of the Securities Exchange Act of 1934 against Liberty Tax, Inc. and two former officers, one of whom is represented by Skadden. The plaintiff’s claims were based on the alleged misconduct of Liberty Tax’s founder and former CEO, which involved, among other claims, purported sexual misconduct. The suit also asserted disclosure-based claims related to the alleged misconduct. The court held that the complaint did not sufficiently allege a material misrepresentation and noted that neither of the two alleged statements were attributable to Skadden’s client.