The Pegasus Fund, Inc. v. Laraneta

617 F.2d 1335 Fed. Sec. L. Rep. P 97,281 The PEGASUS FUND, INC., Vanderbilt Mutual Fund, Inc., and Pegasus Income & Capital Fund, Inc., Plaintiffs-Appellants, v. Ronald J. LARANETA et al., and Federated Investors, Inc., et al., Defendants, and Arthur Young & Company, Defendant-Appellee. No. 77-3450. United States Court of Appeals, Ninth Circuit. Feb. 14, 1980. Rehearing Denied May 20, 1980. Arthur N. Greenberg, Greenberg & Glusker, Los Angeles, Cal., for plaintiffs-appellants. Carl D. Liggio, Arthur Young & Co., New York City (argued), for defendant-appellee; Mitchell L. Lathrop, MacDonald, Halsted & Laybourne, Los Angeles, Cal., on brief. Appeal from the United States District Court for the Central District of California. Before SNEED and TANG, Circuit Judges, and JAMESON * , District Judge. SNEED, Circuit Judge: 1 The plaintiffs-appellants are three mutual funds that charge the defendant-appellee, an accounting firm, with recklessly performing an audit of the funds' financial statements in violation of section 10(b) of the Securities Exchange Act of 1934, 15 U.S.C. § 78j(b), and rule 10b-5, 17 C.F.R. § 240 .10b-5. This appeal is taken from summary…