Orn

MEMORANDUM OPINION

Plaintiffs have brought this action as a class action under section 10(b) of the Securities Exchange Act of 1934 (the “1934 Act”), 15 U.S.C. § 78j(b), and Rule 10b-5 thereunder, 17 C.F.R. § 240 .-10b-5, on behalf of investors who purchased the stock of defendant SMC Investment Corporation (SMC). The complaint alleges, inter alia, that the preliminary and final prospectuses contained material misleading statements and omissions. The defendants include SMC, some of its officers and directors, its management company, its independent auditors, several of the underwriters for the offering and some of their officers, directors, partners and attorneys.

The defendants have moved to strike those paragraphs of the complaint which attempt to state a claim on behalf of persons who purchased shares of SMC in the original distribution, on the ground that their exclusive remedy is under the express civil liability provisions of the Securities Act of 1933 (the “1933 Act”) specifically relating to public offering situations, and particularly under section 11 of the 1933 Act, 15 U. S.C. § 77k. It appears that the applicable statute of limitations for a section 11 action may…