On Jan. 21, 2009, in ECA and Local 134 IBEW Joint Pension Trust of Chicago v. JPMorgan Chase Co., F.3d, 2009 WL 129911, the U.S. Court of Appeals for the Second Circuit affirmed a district court decision dismissing securities fraud claims brought against JPMorgan that arose out of its dealings with Enron.
The circuit based its decision, in part, on its conclusion that an alleged $2 billion misstatement was both quantitatively and qualitatively immaterial as a matter of law. In holding that the misstatement at issue was qualitatively immaterial, the circuit, for the first time, rigorously analyzed three specific considerations set forth in Securities and Exchange Commission Staff Accounting Bulletin No. 99, 64 Fed. Reg. at 45,152 (SAB 99), which the plaintiffs had argued applied.
