Decker

The memorandum disposition filed September 15, 1993, is redesignated as an authored opinion by Judge Kelly.

Background

GlenFed, Inc. is a real estate and financial services holding company that declared a $140.8 million loss for the second quarter of fiscal year (“FY”) 1991, after several years of reporting profitable operations. John Decker and other investors (the proposed class, or the “Plaintiffs”) appeal the district court’s dismissal of their second amended complaint against GlenFed, Inc. and its officers and directors under §§ 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “1934 Act”), 15 U.S.C. §§ 78j(b) and 78t(a), Rule 10b-5, 17 C.F.R. § 240 .10b-5, promulgated by the Securities and Exchange Commission (SEC), and §§ 11,12 and 15 of the Securities Act of 1933 (the “1933 Act”), 15 U.S.C. §§ 77k, 111 and 77o, and various California state law theories including fraud, deceit and negligent misrepresentation.

Plaintiffs allege that GlenFed’s officers and directors made misrepresentations and omissions designed to conceal GlenFed’s deteriorating financial condition, lack of adequate internal controls and declining market. Plaintiffs -contend that the district…