Mark Stoyas v. Toshiba Corporation, et al.

In a significant ruling on an issue of first impression, the US District Court for the Central District of California concluded a long-running securities class action litigation filed on behalf of a group of Toshiba shareholders. Analysis Group was retained by White & Case LLP on behalf of the electronics company, the defendant in the case.

The shareholders alleged that Toshiba committed accounting fraud and made financial misrepresentations during fiscal years 2011–2013. According to the plaintiffs, Toshiba’s share price fell significantly in the eight months between its April 2015 announcement of an internal investigation into the company’s accounting practices and its November 2015 issuance of a financial restatement. They sought damages for violations of the Securities Exchange Act and the Financial Instruments and Exchange Act of Japan (JFIEA).

An Analysis Group team led by Principal Eric Korman and including Vice President Rachel Bechek and Manager Ivan Kirov provided consulting to White & Case throughout the case on issues related to class certification and damages. Mr. Korman also submitted an expert report in opposition to class certification and testified at deposition.

In its ruling, the district court denied the plaintiffs’ motion for class certification and dismissed the plaintiffs’ claims on summary judgement under both the JFIEA and the Exchange Act. Subsequently, the US Court of Appeals for the Ninth Circuit affirmed the district court’s judgement.