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Mintz Wins Second Circuit Victory for BTA Bank in Long-Running Securities Fraud Case

New York, NY Mintz achieved a significant victory for BTA Bank (BTA) on January 18, when the U.S. Court of Appeals for the Second Circuit affirmed summary judgment dismissing all claims against BTA in a nearly decade-long securities fraud lawsuit alleging violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. This decisive issue of what loss causation evidence a holder of thinly-traded securities must present to prove such claims was a matter of first impression in the Second Circuit.

BTA was once the largest bank in Kazakhstan but faced financial difficulties and was forced to restructure its debts in 2010 and 2012. Certain bondholders then sued in the U.S., contending that the bank’s 2010 restructuring memorandum omitted material information.

In August 2020, BTA won summary judgment in the trial court, with the U.S. District Court for the Southern District of New York finding that the bank did not omit any material information from investors and that, even if it had, Plaintiffs had failed to present evidence that their investment losses were caused by any omission. 

On appeal, plaintiffs argued that the district court had engaged in improper factfinding and that plaintiffs need not and could not distinguish the losses allegedly caused by defendants’ omissions from losses caused by other factors. The Second Circuit disagreed, dispensing with Plaintiffs’ arguments and awarding BTA a complete victory.

Renat Salykbayev, BTA’s litigation manager, said: “We were confident that the Courts of Appeal would come to the right and fair conclusion, and well pleased with a complete victory.”

Mintz Member Jason Vigna argued the case in both the Second Circuit and the District Court. Along with Mr. Vigna, the Mintz team consisted of the Co-chair of the firm’s Appellate Practice Group Emily Kanstroom Musgrave and Associate Patrick McDonough.

The case is Atlantica Holdings, Inc. v. Sovereign Wealth Fund Samruk-Kazyna, Case No. 20-2805-cv (2d Cir. Jan. 18, 2022).


Note: Mr. Vigna’s representation of BTA began in 2016, and he joined Mintz in 2021.

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