Rubke v. Capitol Bancorp Ltd.
Court of Appeals for the Ninth Circuit · 2009-01-13 · cited 148×
The case involved minority shareholders of Napa Community Bank who sued Capitol Bancorp and its CEO, alleging violations of section 11 of the Securities Act of 1933 and sections 10(b) and 14(e) of the Securities Exchange Act of 1934 in connection with a share exchange offer that allowed Capitol to acquire additional shares at approximately 150% of book value. The plaintiffs claimed that registration statements, offer documents, and related phone calls contained material misrepresentations and omissions about the fairness of the offer and the value of the shares. The district court dismissed the complaint, and the Ninth Circuit affirmed the dismissal with prejudice, holding that the claims failed to satisfy the heightened pleading requirements of Federal Rule of Civil Procedure 9(b) for the section 11 claims and the Private Securities Litigation Reform Act for the section 10(b) and 14(e) claims, as the allegations did not sufficiently plead falsity or misleading statements with particularity.
