Jeffrey A. Cochran v. The Penn Mutual Life Insurance Company, et al, No. 20-13477 (11th Cir. 2022)Annotate this Case
Plaintiff filed a putative class action lawsuit against brokerage firm Hornor, Townsend & Kent (“HTK”) and its parent company The Penn Mutual Life Insurance Company. The complaint alleged that HTK breached its fiduciary duties under Georgia law and that Penn Mutual aided and abetted that breach. The district court concluded that the Securities Litigation Uniform Standards Act (“SLUSA”) barred Plaintiff from using a class action to bring those state law claims.
The Eleventh Circuit affirmed the district court’s dismissal. The court explained that SLUSA’s bar applies when “(1) the suit is a ‘covered class action,’ (2) the plaintiffs’ claims are based on state law, (3) one or more ‘covered securities’ has been purchased or sold, and (4) the defendant [allegedly] misrepresented or omitted a material fact ‘in connection with the purchase or sale of such security.’”
Here, the only disputed issue is whether Plaintiff’s complaint alleges a misrepresentation or omission. The court reasoned that the district court correctly dismissed the actions because the complaint alleges “an untrue statement or omission of material fact in connection with the purchase or sale of a covered security."