Zaidi v. Adamas Pharmaceuticals, Inc.
- Jeffrey White
- 4:19-cv-08051
- U.S. District Court · Northern District of California
- 1
In Zaidi v. Adamas Pharmaceuticals, Judge White dismissed plaintiffs’ Section 20(a) claims because Richard King was the only alleged primary securities-law violator.
The plaintiffs’ Section 20(a) claims were dismissed. The order specifically concerns Defendant Richard King and does not identify any further effect on the other defendants.
What happened
In Zaidi v. Adamas Pharmaceuticals, Inc., Defendant Richard King questioned whether he could be liable under Section 20(a) of the federal securities laws. The issue arose in the parties’ joint case-management statement after the court’s earlier ruling on the defendants’ motion to dismiss.
The court explained that a Section 20(a) claim requires a primary violation of federal securities laws and a defendant’s actual power or control over the person who committed that violation. The court’s earlier ruling left King as the only defendant alleged to have committed a primary violation of Section 10(b).
The court dismissed the plaintiffs’ Section 20(a) claims. Judge White did not specify whether the dismissal was with or without prejudice.
The detailed version
- Zaidi v. Adamas Pharmaceuticals, Inc. · No. 4:19-cv-08051
- Jeffrey White
- Mar. 29, 2023
Background
In a joint case-management conference statement, Defendant Richard King raised whether he could be held liable under Section 20(a) of the federal securities laws. The court revisited its earlier order granting in part and denying in part the defendants’ motion to dismiss.
Legal standard
The court stated that a plaintiff asserting a Section 20(a) claim must prove two things: (1) a primary violation of federal securities laws and (2) that the defendant exercised actual power or control over the primary violator. A primary violation is the underlying securities-law violation on which the control-person claim depends.
Court’s ruling
Based on its earlier ruling, the court determined that King was the only defendant alleged to have committed a primary violation of Section 10(b). The court stated that it should have dismissed, and was then dismissing, the plaintiffs’ claims alleging violations of Section 20(a). The order does not state whether the dismissal was with or without prejudice.
Read the full 1-page opinion on CourtListener, the free public archive maintained by the Free Law Project.