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Dronsejko v. Grant Thornton, No. 09-4222

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By FindLaw Staff on January 20, 2011 5:39 PM

Securities Fraud Action Against Accounting Firm

In Dronsejko v. Grant Thornton, No. 09-4222, a securities fraud class action against an accounting firm claiming improper revenue recognition that materially overstated a corporation's revenues and earnings, the court affirmed the district court's denial of plaintiffs' Rule 60(b) motion where the complaint failed to give rise to a cogent and compelling inference that defendant's actions constituted an extreme departure from the standards of ordinary care, or that no reasonable accountant would have made the same decisions if confronted with the same facts.

 

As the court wrote:  "This is a securities class action pursuant to Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5, brought on behalf of class members who purchased iMergent common stock between October 15, 2002 and October 7, 2005. Aplt. App. 47, 60-63, 105-107. The basis of the claim is improper revenue recognition that materially overstated revenues and earnings and, in August 2005, led to a restatement of iMergent's financial statements for fiscal years 2002, 2003, and 2004. Aplt. App. 70, 91, 106."

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