A district court judge has denied James Blahnik’s motion for summary judgment in the United States Securities and Exchange Commission’s securities fraud cause against Delphi Corporation, a number of its senior officers, other employees, and an individual who worked for a third party.
The SEC had accused the defendants of misstating its operating results and financial condition in its offering documents and SEC filings. A number of the defendants have already settled with the SEC, leaving Blahnik, Paul Free, Paul Free, Catherine Rozanski, and Milan Belans to request summary judgment.
During a February 3 hearing, Blahnik’s lawyer said his client, who formerly served as a Delphi Treasurer before being promoted to Vice President of Treasury, Mergers and Acquisitions, intended to depend on the argument that he could not be held primarily liable for violating § 10(b) of the Securities and Exchange Act or Rule 10b-5 because he did not directly issue false statements to the investing public. The Court told Blahnik to make his case in a letter. Yet even after letters were exchanged Blahnik and the SEC, his motion for summary judgment was denied.
The SEC has accused the former Delphi executive of being involved in the following schemes: European Factoring, the PGM Transaction with Bank One, and the Cores and Batteries Transaction with BBK. The SEC contends that a number of Blahnik’s activities resulted in false statements made in the company’s 2001 and 2003 offering documents, 2000 Form 10-K, 2002-2004 Forms 8-K, and the incorporation of the 2000 Form 10K.
The Court noted that Blahnik, in his letters, failed to persuade that he can’t be held primarily liable under the law for the theory put forth by the SEC. The matter must therefore be resolved during trial.
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