Court Urged to Reject Motions to Dismiss Intelsat Insider-Trading Claims
The FCC’s apparent 2019 rejection of the proposed “do-or-die” deal for Intelsat and other C-Band Alliance members to privately auction $60 billion in spectrum, and the $246 million in Intelsat stock divested by top investors in “a rushed overnight fire sale” before the bad news got out, “would lead any reasonable person and juror to believe that there was insider trading.” So said lead plaintiff the Walleye Group in its opposition Thursday (docket 4:20-cv-02341) in U.S. District Court for Northern California in Oakland, to the Silver Lake defendants’ Jan. 19 motion to dismiss Walleye’s second amended complaint (see 2301190044).
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All the new allegations in Walleye’s second amended complaint “further strengthen what the ‘cogent’ and ‘compelling’ narrative of the alleged facts has always been” -- that the defendants possessed material nonpublic information (MNPI) about Intelsat at the time of the stock trade, said the opposition. The defendants’ “various” motions to dismiss Walleye’s insider trading claims “all boil down” to the “homogenous but wholly inappropriate strategy” of arguing against the “well-pled facts” by construing them in the defendants’ favor, it said.
The court should reject the defendants’ “improper tactics that have no basis in the law,” said the opposition. The defendants’ “improper assertions” seek to “cloud the truth” about the insider trading that took place, it said. The court also should reject all motions to dismiss the second amended complaint, and let lead plaintiff Walleye do “discovery in this action,” it said.
The MNPI identified in the second amended complaint on Intelsat’s “bet-the-company” private auction plan is “actionable,” said the opposition. The defendants’ briefs “cast no doubt on the materiality of this information,” it said. That the Nov. 5, 2019, meeting at the FCC meeting occurred at all was MNPI, it said. It “confounds the mind” to state the existence of the meeting itself “was not material,” it said.
That the FCC “previously had seemingly indicated strong support for a private auction, but dramatically reversed course” during the meeting also is MNPI, said the opposition. Later events “serve as persuasive corroboration” that what was communicated at the November 2019 meeting was indeed a reversal in the FCC’s position to reject a private auction in favor of a public auction in which the proceeds would go to the U.S. Treasury, it said.
The defendants’ “main argument in response is simply a self-serving attempt to introduce outside hearsay to dispute the well-pled facts in the complaint,” said the opposition. “Separate and apart” from the fact that the FCC was reversing course and its position, Intelsat management’s judgment and after-the-meeting “determination about the FCC’s position -- in and of itself -- was clearly MNPI,” it said.