A while back, I wondered whether we could expect to see a federal securities fraud lawsuit filed over the Dole Food merger. If so, it would be that rarest of animals – a Section 10(b) claim predicated on the allegation that the defendants intentionally manipulated prices downward rather than upward.

Well, wish granted. A couple of days ago, my old law firm (I swear I had nothing to do with it!) filed a complaint in the District of Delaware alleging that Dole Food, Murdock, and Carter intentionally drove down Dole’s stock price to facilitate Murdock’s buyout. The complaint doesn’t explain the legal theories, but it seems to be setting up a claim that – because Carter was the only one who directly made false statements – he was acting as Murdock’s agent when doing so . See, e.g., ¶38 (“With Carter able to serve as Murdock’s mouthpiece, Defendants effectuated Murdock’s buyout of Dole on the cheap.”).  Apparently, the federal plaintiffs were waiting for a resolution to the state claims before filing their own action.

I’ve flogged this horse before (is that even a metaphor?) but these kinds of parallel lawsuits (especially when considered in conjunction with situations where the SEC brings an action, or there are even are criminal enforcement actions associated with underlying conduct) really bring into sharp relief questions about the purpose of our securities enforcement regime. No question, the claims brought in this action involve a different set of plaintiffs than the ones in the Delaware action, and a different type of harm; but if you accept the dominant narrative that the purpose of the securities class action is deterrence rather than compensation, all that should matter is the point at which damages are sufficient to deter future frauds – and right now, there is no coherent system for making that calculation.