LAS VEGAS (CN) – A shareholder made an honest effort to revise a shareholder class action against Sheldon Adelson and Las Vegas Sands, so he won’t be sanctioned despite its dismissal, a federal judge ruled.
U.S. District Judge James C. Mahan on Thursday denied a motion from Sheldon Adelson et al. for sanctions against lead plaintiff W.A. Sokolowski, who in 2014 accused Las Vegas Sands of misstatements and omissions in proxy statements to shareholders and the SEC.
The lawsuit included supplemental claims under state law, for breach of fiduciary duty/corporate waste, unjust enrichment, breach of fiduciary duty of candor, and breach of duty of loyalty.
The court dismissed the original complaint when Sokolowski could not show he owned shares in the Sands during the time the claimed misconduct occurred. He was given leave to amend and provide factual allegations showing his ownership of shares from the time the claimed misconduct occurred to the time he filed the complaint. Sokolowski had been a Sands shareholder since Feb. 9, 2012.
He filed an amended complaint on Aug. 29, 2014, in which he dropped claims for conduct occurring before he owned shares, but retained allegations of misconduct from the time he bought shares, and made more particular claims of misconduct after he bought shares.
Mahan dismissed the amended complaint on June 19, 2015, saying Sokolowski did not make a required “short and plain statement” demonstrating claims for which he is entitled to relief. His factual information supported only pre-purchase misconduct, and allegations of wrongdoing after he bought shares were conclusory, without sufficient factual allegations of wrongdoing.
The Sands said Sokolowski’s complaints lacked legal basis and asked for legal fees and costs.
But Mahan found that Sokolowski’s amended complaint included new allegations of misconduct that occurred after he bought shares, which were not included in the original complaint.
Because he did try to establish new factual claims, and clearly stated that his claims apply to the time after he bought shares, Mahan said, Sokolowski complied with the court’s order dismissing the original complaint and is not subject to sanctions.
Adelson is the principal shareholder and CEO of Las Vegas Sands. Sokolowski also sued his board of directors.
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