District Judge Valerie E. Caproni
Defendants moved to dismiss shareholder derivative complaint alleging defendants violated §14(a) of the Exchange Act, breached their fiduciary duties as board members, and unjustly enriched themselves by a scheme to manipulate the foreign currency exchange market. The scheme was engineered by employees of various major banks; for its traders’ role in the scheme, nominal defendant Bank of America entered settlements with antitrust plaintiffs and the government. Plaintiff’s complaint alleged that the traders’ misconduct occurred under defendants’ watch and that defendants caused or allowed BoA to participate in the illegal scheme, and further made false and misleading statements by failing to disclose BoA’s exposure to liability for the scheme. The court granted defendants’ motion, holding that plaintiff had failed to allege with adequate particularity defendants’ wrongful refusal of his litigation demand. The court noted that defendants were well-informed of the circumstances of plaintiff’s demand from 2 years of regulatory investigations and lawsuits in the matter. The court also held defendants’ refusal was a valid exercise of their business judgment. The court concluded that the Exchange Act claim was time-barred.