Zelman

Zelman v. JDS Uniphase Corp.

Good Law

376 F. Supp. 2d 956·2005 WL 1649042·2005 U.S. Dist. LEXIS 17785

United States District Court, Northern District of CaliforniaJuly 13, 2005C-02-4656 WWSCalifornia10,124 words

Opinion

Schwarzer, J.

Shirley Zelman, a purchaser of securities called GOALs, brings this securities fraud action against JDS Uniphase Corporation (JDSU) and four of its former directors on behalf of herself and other GOALs purchasers. JDSU and Kevin Kalkhoven, one of its former directors, have moved separately to dismiss the Complaint. For the reasons presented below, the Court denies the JDSU defendants’ motion to dismiss and grants in part Kalkhoven’s motion to dismiss, with leave to amend.

BACKGROUND

Since the Court is considering Defendants’ motions to dismiss, the following description is drawn from Plaintiffs complaint. See In re Daou Systems, Inc., Sec. Litig., 397 F.3d 704, 709-10 (9th Cir.2005) (“[W]e accept the plaintiffs’ allegations as true and construe them in the light most favorable to plaintiffs.”) (internal quotation marks and citation omitted).

The GOAL notes Plaintiff purchased were “equity-linked” debt securities issued by the Swiss bank UBS AG (UBS). The GOALs sold at a face value of $1000, paid 26% interest per annum, and were set to mature on September 12, 2002, 18 months after issuance. The nature of the payment to which holders were entitled at the notes’ maturity depended…

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