United States District Court, S.D. New York
For Lead Plaintiffs: Samuel H. Rudman, Esq., David A. Rosenfeld, Esq., Mark T. Millkey, Esq., Christopher M. Barrett, Esq., Robbins Geller Rudman & Dowd LLP, Melville, NY.
For Defendant Price WaterhouseCoopers LLP: Miles N. Ruthberg. Esq., Jamie L. Wine, Esq., Kevin M. McDonough, Esq., Latham & Watkins LLP, New York, NY.
For Defendant Ernst & Young: Stanley J. Parzen, Esq., Dana S. Douglas, Esq., Mayer Brown LLP (Chicago), Chicago, IL.
For Defendant Overseas Shipholding Group, Inc.: Lewis J. Liman, Esq., Elizabeth Vicens, Esq., Cleary Gottlieb Steen & Hamilton, LLP, New York, NY.
For Defendant Morten Arntzen: Scott B. Schreiber, Esq., Craig A. Stewart, Esq., Arnold & Porter, Thurman Arnold Building, Washington, DC.
For Defendant Myles R. Itkin: David H. Kistenbroker, Esq., Joni S. Jacobsen, Esq., Ashley J. Burden, Esq., Neil A. Steiner, Esq., Dechert LLP, Chicago, IL.
For Consolidated Defendants Alan R. Batkin, Thomas P. Coleman, Charles A. Fribourg, Stanley Komaroff, Solomon N. Merkin, Joel I. Picket, Ariel Recanati, Oudi Recanati, Thomas F. Robards, Jean-Paul Vettier, Michael J. Zimmerman: Richard A. Rosen, Esq., Paul, Weiss, Rifkind, Wharton & Garrison LLP, New York, NY.
For Consolidated Defendants Citigroup Global Markets Inc, Deutsche Bank Securities Inc., Goldman, Sachs & Co., HSBC Securities (USA) Inc., ING Financial Markets, LLC, Morgan Stanley & Co. LLC (f/k/a Morgan Stanley & Co. Incorporated), DNB Markets, Inc. (f/k/a DnB NOR Markets, Inc.): Adam Selim Hakki, Esq., Daniel Hector Rees Laguardia, Esq., Stuart Jay Baskin, Esq., Shearman & Sterling LLP, New York, NY.
MEMORANDUM OPINION AND ORDER
Shira A. Scheindlin, United States District Judge.
On October 20, 2014, plaintiffs moved for leave to file a fourth amended complaint. The purpose of the amendment is to add fraud claims against the auditor defendants -- PriceWaterhouseCoopers (" PwC" ) and Ernst & Young (" E& Y" ) -- who, under the current complaint, face only negligence claims. According to plaintiffs, discovery of PwC's and E& Y's work papers has elicited new facts -- facts that plausibly give rise to an inference that PwC and E& Y performed, in effect, " no audit at all."  For the reasons set forth below, I disagree. The 10(b) claims against the auditor defendants fail as a matter of law, and plaintiffs' motion for leave to amend is therefore DENIED.
II. STANDARD OF REVIEW
Leave to amend a pleading " shall be freely given when justice so requires."  Such leave is not warranted, however, if " the  amendment [would be] futile,"  which is true insofar as " the proposed claim could not withstand a motion to ...