IN RE CENDANT CORPORATION SECURITIES LITIGATION; This document relates to: EILEEN MCLAUGHLIN, Plaintiff, 5. CENDANT CORPORATION, et al., Defendants., 76 F. Supp. 2d 539

Summary

Defendants sought dismissal under Fed. R. Civ. P. 12(b)(6) in securities fraud case. Plaintiff's complaint stemmed from a loss in value of stock she received through an employee stock option plan. Plaintiff's participation in the option plan was not an individual affirmative decision to give up wages for stock, but was rather a part of a group compensation plan where her only choice was to forego the benefit altogether if she did not want it. The court concluded that plaintiff's option plan participation created no "purchase or sale" of securities to create standing under § 10(b) of the Securities Exchange Act (§ 10(b)), 15 U.S.C.S. § 78j(b), or to create a fiduciary relation for controlling person liability. Even if plaintiff were to have demonstrated by amending her complaint that a sale had taken place, she failed to allege fraud for purposes of § 10(b). Dismissal with prejudice entered for defendants.