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| Fishoff v. Coty |
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Coty Inc.
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| Our attoneys obtained a motion to dismiss in a case involving securities and common law fraud claims asserted against our client, Coty Inc. The case arose out of purported misrepresentations in connection with the exercise of 200,000 vested stock options under the Coty Long-Term Incentive Plan (LTIP) by Coty's then-CFO, a participant in the LTIP. Coty moved to dismiss, primarily on the grounds that the plaintiff's participation in the LTIP did not involve a purchase or sale of a security within the meaning of the Securities Exchange Act of 1934. In granting Coty's motion, the court applied the standard adopted by the Supreme Court in International Brotherhood of Teamsters v. Daniel, 439 U.S. 551 (1979), that an employee pension or benefit plan is not an investment contract within the meaning of the federal securities laws unless it is found to be both voluntary and contributory. The court concluded that the Coty plan was not contributory, holding that where an employee neither gives anything of value for stock other than the continuation of employment nor independently bargains for such stock, there is no purchase or sale of securities. The court further held that the complaint otherwise failed to state an actionable claim for fraud. |
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