Judge dismisses Optionable suit
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- October
- 21
A federal judge dismissed a shareholder class action lawsuit against Optionable Inc., a Valhalla-based energy trading company whose problems last year included the collapse of its stock price, the loss of its largest customer and the resignation of a top executive with a criminal record.
The shareholder lawsuit alleged that Optionable executives made false and misleading statements about the company’s revenues, the quality of its brokerage services and other matters.
U.S. District Judge Lewis A. Kaplan of the Southern District of New York in Manhattan dismissed the suit on Monday after concluding that the case was deficient.
“Many of plaintiffs’ factual allegations are not based on an adequate source or are unsupported by the purported source,†the judge wrote in an opinion on Sept. 15.
The case was one of several class-action suits that investors filed against the company after Optionable’s biggest customer, Bank of Montreal, suspended trading through Optionable’s brokerage services in May 2007. That decision came after the Canadian bank reported a pretax loss of up to $406 million from trades in natural gas contracts. Suspension of Bank of Montreal’s business was a blow to Optionable because the client accounted for a major part of Optionable’s business.
Optionable got more bad publicity when it was disclosed that former Chief Executive Officer Kevin P. Cassidy had previously been in federal prison for tax evasion and credit card fraud.
As investors reacted to the setbacks, Optionable’s shares plunged 97 percent in a matter of months. The shares rose 4 cents yesterday to close at 8 cents.
Kahn Gauthier Swick, a law firm with offices in New Orleans and New York City, filed the suit on behalf of Optionable shareholders. Attorneys at the firm could not be reached for comment. A spokesman for Optionable also could not be reached for comment.
This entry was posted
on Tuesday, October 21st, 2008 at 4:35 pm by Jay Loomis.
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Category: Lawsuits
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