In re Grupo Televisa Sec. Litig., 368 F. Supp. 3d 711

Background

Lead plaintiff, a pension plan, bought Televisa ADRs and alleges nearly $1M in losses from defendants' misconduct tied to FIFA World Cup broadcast rights.
Defendants: Grupo Televisa (media conglomerate), former CEO/controlling shareholder Emilio Azcárraga, and former CFO Salvi Folch; alleged bribery funneled through Televisa's Swiss subsidiary Mountrigi.
Criminal investigations into FIFA corruption revealed testimony (Alejandro Burzaco) and a Torneos ledger indicating a $7.25 million Mountrigi payment in April 2013 for 2026/2030 World Cup rights, with entries described as bribes.
Televisa repeatedly certified in Form 20-Fs and SOX certifications that its disclosure controls and internal controls over financial reporting were effective and touted its World Cup rights in earnings calls and public statements.
In January 2018 Televisa disclosed material weaknesses in internal controls (Form 6-K), later filed a 2017 Form 20-F asserting those weaknesses caused no prior misstatements, and defended itself against plaintiff allegations.
The district court considered defendants' motion to dismiss claims under Section 10(b)/Rule 10b-5 and Section 20(a) and denied the motion, finding the complaint sufficiently pleaded bribery, misstatements, scienter, and control-person liability.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether bribery allegations and supporting evidence meet PSLRA/Rule 9(b) particularity	Complaint points to trial testimony (Burzaco), Torneos ledger showing $7.25M Mountrigi payment, and criminal filings to identify who, what, when, where, how	Allegations are insufficiently specific and rely on third-party testimony/records; too speculative to plead bribery with particularity	Court: Allegations are particular enough—identify actors, amounts, dates, bank transfers and nexus to Mountrigi; survive pleading stage
Whether public statements (20-Fs, SOX certifications, earnings calls, code of ethics) were false/misleading	Statements assuring effective internal controls and lawful acquisition of rights concealed bribery and weak controls that enabled scheme	Statements were puffery or aspirational; not actionable; any omissions immaterial	Court: Statements are actionable when juxtaposed with allegations of concealed bribery and pervasive control weaknesses; duty to "speak the whole truth" when addressing topic
Whether scienter is adequately pleaded for Televisa and executives	Corroborated testimony, ledger, criminal information, and conduct (design of controls enabling skimming) support inference of knowledge or reckless disregard	Televisa's internal investigation and later disclosures undermine scienter inference; allegations are circumstantial	Court: Cogent inference of scienter supports claim—subsidiary's conduct imputable to parent and executives; disclosures do not negate the inference at pleading stage
Whether control-person liability under § 20(a) is pleaded against Azcárraga and Folch	Plaintiffs allege a primary violation by Televisa, Azcárraga/Folch had control and were culpable participants	Defendants dispute scienter and control sufficiency	Court: § 20(a) adequately pleaded (primary violation, control, culpable participation)

Key Cases Cited

Carpenters Pension Tr. Fund of St. Louis v. Barclays PLC, 750 F.3d 227 (2d Cir.) (pleading specificity under PSLRA and Rule 9(b))
Rombach v. Chang, 355 F.3d 164 (2d Cir.) (Rule 9(b) particularity for securities fraud complaints)
ATSI Commc'ns, Inc. v. Shaar Fund, Ltd., 493 F.3d 87 (2d Cir.) (elements for pleading misstatements in securities cases)
Slayton v. Am. Express Co., 604 F.3d 758 (2d Cir.) (effect of internal investigation/disclosure on scienter inference)
Meyer v. Jinkosolar Holdings Co., 761 F.3d 245 (2d Cir.) (duty to disclose when a company speaks on an issue)
In re Braskem S.A. Sec. Litig., 246 F. Supp.3d 731 (S.D.N.Y.) (materiality of revenue derived from potentially illicit arrangements)
In re Petrobras Sec. Litig., 116 F. Supp.3d 368 (S.D.N.Y.) (SOX/internal control statements and scienter)
In re Banco Bradesco S.A. Sec. Litig., 277 F. Supp.3d 600 (S.D.N.Y.) (requiring particularized bribery scheme allegations)
In re Marsh & McLennan Cos., Inc. Sec. Litig., 501 F. Supp.2d 452 (S.D.N.Y.) (imputing subsidiary scienter to parent)
Ashcroft v. Iqbal, 556 U.S. 662 (U.S.) (standard for accepting complaint allegations at pleading stage)