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In Re N2k Inc. Securities Litigation Kenneth Bender, Individually and on Behalf of All Others Similarly Situated, Mollie Kuhn Bender, Individually and on Behalf of All Others Similarly Situated, Consolidated-Plaintiff-Appellant, William L. Manns, Jean Morrison, Paul S. Marantz, and Mark Talbert v. Laurence L. Rosen, Robert David Grusin, James E. Coane, Bruce Johnson, Robert C. Harris, Jr., Susanne Harrison, N2k, Inc., Painewebber, Allen & Co., Bear Stearns & Company, Incorporated, Consolidated- and Jonathan v. Diamond

Citation: 202 F.3d 81Docket: 1999

Court: Court of Appeals for the Second Circuit; February 6, 2000; Federal Appellate Court

Narrative Opinion Summary

Plaintiffs-appellants brought a class action against N2K, Inc., an online music company, alleging violations of Sections 11 and 15 of the Securities Act of 1933. They claimed that the defendants disseminated materially false and misleading materials during a secondary offering of N2K common stock by failing to disclose key financial results for the first quarter of 1998. The defendants moved to dismiss the case under Federal Rule of Civil Procedure 12(b)(6), arguing that the complaint did not state a valid claim. The U.S. District Court for the Southern District of New York, presided over by Judge Harold Baer Jr., granted the motion and dismissed the complaint with prejudice. The Court of Appeals for the Second Circuit affirmed this decision, agreeing with the lower court's reasoning. Notably, the appellate court expressed no opinion on specific commentary in a footnote from the District Court's opinion.

Legal Issues Addressed

Appellate Review of District Court Decisions

Application: The Court of Appeals for the Second Circuit reviewed and affirmed the District Court's decision to dismiss the complaint.

Reasoning: The Court of Appeals for the Second Circuit affirmed this decision, agreeing with the lower court's reasoning.

Dismissal with Prejudice

Application: The District Court dismissed the complaint with prejudice, preventing the plaintiffs from filing another case on the same grounds.

Reasoning: The U.S. District Court for the Southern District of New York, presided over by Judge Harold Baer Jr., granted the motion and dismissed the complaint with prejudice.

Material Misrepresentation in Securities Offerings

Application: Plaintiffs claimed defendants failed to disclose key financial results for the first quarter of 1998, constituting material misrepresentation.

Reasoning: They claimed that the defendants disseminated materially false and misleading materials during a secondary offering of N2K common stock by failing to disclose key financial results for the first quarter of 1998.

Motion to Dismiss under Federal Rule of Civil Procedure 12(b)(6)

Application: The defendants successfully moved to dismiss the complaint under Rule 12(b)(6) on the grounds that the complaint did not state a valid claim.

Reasoning: The defendants moved to dismiss the case under Federal Rule of Civil Procedure 12(b)(6), arguing that the complaint did not state a valid claim.

Securities Act of 1933 - Sections 11 and 15

Application: The plaintiffs alleged violations of Sections 11 and 15 of the Securities Act of 1933 by claiming the defendants disseminated materially false and misleading materials during a secondary offering.

Reasoning: Plaintiffs-appellants brought a class action against N2K, Inc., an online music company, alleging violations of Sections 11 and 15 of the Securities Act of 1933.