Logourl black
From our private database of 14,200+ case briefs...

In re WorldCom, Inc. Securities Litigation

United States District Court for the Southern District of New York
346 F. Supp. 2d 628 (2004)


Facts

Following the collapse of WorldCom, a class action suit was filed against WorldCom, as well as its underwriters. WorldCom engaged in deceptive accounting practices in 2000 and 2001. At this time, its auditor, Arthur Anderson, insisted that the company was financially sound through several comfort letters. WorldCom’s financial statements indicated that the company was performing much better than its competitors. Also at this time, WorldCom issued stock, which was distributed through its underwriters. These underwriters consisted of several prominent financial institutions. Upon WorldCom’s collapse, its investors alleged that its underwriters were engaged in fraud along with WorldCom. The underwriters then asserted that they were entitled to the protections of the due diligence defense provided by federal securities laws, because they relied on the statements provided by WorldCom’s auditor, Arthur Anderson. The underwriters then moved for summary judgment based on this defense.

Rule of Law

Issue

Holding and Reasoning (Cote, J.)

What to do next…

  1. Unlock this case brief with a free (no-commitment) trial membership of Quimbee.

    You’ll be in good company: Quimbee is one of the most widely used and trusted sites for law students, serving more than 97,000 law students since 2011. Some law schools—such as Yale, Vanderbilt, Berkeley, and the University of Illinois—even subscribe directly to Quimbee for all their law students. Read our student testimonials.

  2. Learn more about Quimbee’s unique (and proven) approach to achieving great grades at law school.

    Quimbee is a company hell-bent on one thing: helping you get an “A” in every course you take in law school, so you can graduate at the top of your class and get a high-paying law job. We’re not just a study aid for law students; we’re the study aid for law students. Read more about Quimbee.

Here's why 241,000 law students have relied on our case briefs:

  • Written by law professors and practitioners, not other law students. 14,200 briefs, keyed to 189 casebooks. Top-notch customer support.
  • The right amount of information, includes the facts, issues, rule of law, holding and reasoning, and any concurrences and dissents.
  • Access in your classes, works on your mobile and tablet. Massive library of related video lessons and high quality multiple-choice questions.
  • Easy to use, uniform format for every case brief. Written in plain English, not in legalese. Our briefs summarize and simplify; they don’t just repeat the court’s language.