Clark Smith Villazor LLP Appeals Two Novel Legal Questions to the Second Circuit

On September 6, 2024, Chris Clark and Benjamin Dozier, on behalf of client VR Capital, filed a fully briefed appeal in the United States Court of Appeals for the Second Circuit.  As set forth in the brief and reply, the appeal raises a novel legal question regarding the extent to which misstatements by a sovereign may be imputed an entity it wholly owns – specifically, whether misstatements by the Venezuelan Maduro regime and opposition-controlled National Assembly may be imputed to PDVSA, an oil and natural gas company wholly owned by the Republic of Venezuela. The appeal also raises a novel legal question regarding the scope of scheme liability under Section 10(b) of the Exchange Act and Rules 10b-5(a) and (c) thereunder. As set forth fully in VR Capital’s briefing, the U.S. District Court for the Southern District of New York dismissed VR Capital’s amended complaint in April 2024, but did not address VR’s argument that PDVSA is bound by Venezuela’s misstatements.