Walker v. Chidambaran. — Entry #101: RESPONSE in Support re 82 MOTION to Dismiss for Failure to State a Claim filed by Thomas Olivier.(Selden, Philip) (Entered: 10/22/2025)

Case 8:24-cv-02900-DKC        Document 101   Filed 10/22/25     Page 1 of 9


                        UNITED STATES DISTRICT COURT
                        FOR THE DISTRICT OF MARYLAND


                                       )
DANNY WALKER,                          )
                                       )
                   Plaintiff,          )
                                       )
      v.                               )     Civil Action No. 8:24-cv-02900-DKC
                                       )
iLEARNING ENGINES, INC., et al.,       )
                                       )
                   Defendants.         )
                                       )


DEFENDANT THOMAS OLIVIER’S REPLY IN SUPPORT OF MOTION TO DISMISS


Jorge L. Piedra (Pro Hac Vice)             Philip A. Selden (Bar No. 28596)
Rasheed K. Nader (Pro Hac Vice)            Alicia L. Shelton (Bar No. 11538)
Alexa G. Chinchilla (Pro Hac Vice)         Cole Schotz P.C.
KOZYAK TROPIN THROCKMORTON                 1201 Wills Street, Suite 320
2525 Ponce de Leon Blvd., Floor 9          Baltimore, Maryland 21231
Coral Gables, Florida 33134                (410) 528-2987 (phone)
(305) 372-1800 (phone)                     (410) 528-9407
[email protected]                         [email protected]
[email protected]                          [email protected]
[email protected]
                                           Counsel for Defendant Thomas Olivier
Counsel for Defendant Thomas Olivier


         Case 8:24-cv-02900-DKC          Document 101         Filed 10/22/25      Page 2 of 9


    I.   Plaintiffs Have Not Plausibly Alleged That Their Shares Are “Traceable” to the
         Registration Statements.

         Plaintiffs argue that they need not offer affirmative proof at the pleading stage that their

shares are traceable to the allegedly defective registration statement. (See Opp.1 at 9). Instead of

alleging such, Plaintiffs maintain that they only need to plausibly allege that the shares are

traceable to the Form S-1 and Form S-8, the “Offering Documents.” (See Opp. at 2). Plaintiffs

miss the mark. Even though plausibility, not proof, is the standard at this stage, Plaintiffs’

conclusory allegations of traceability are not sufficient to plausibly allege that their shares are

traceable to the registration statements.

         This Court has explicitly held that a plaintiff seeking to establish Section 11 liability must

either (1) “prove that the shares at issue were purchased directly in the secondary offering” or, (2)

“if the shares were purchased in the aftermarket, prove that the chain-of-title for the shares can be

traced back to the secondary offering, starting with the plaintiff’s purchase and ending with

someone who purchased directly in the secondary offering.” Fanucchi v. Enviva Inc., No. DKC

22-2844, 2024 WL 3302564, at *18 (D. Md. July 3, 2024) (emphasis added). The traceability of

purchased shares to the offering documents, the Court continued, must be rendered plausible by

“accompanying factual enhancement” in the complaint’s allegations. Id. at *18. Plaintiffs’

allegations are devoid of the “factual enhancement” required to make traceability plausible for

purposes of Section 11 liability.

         Fanucchi is instructive here. In Fanucchi, Enviva, a “sustainability-focused biomass

energy company,” issued 4,945,000 shares of Enviva common stock at $70.00 per share. Id. at *1-

2. Following a short-seller’s report published by investment firm Blue Orca, asserting that Enviva


1
 Plaintiffs’ Memorandum of Law in Opposition to Independent Defendants’ Motions to Dismiss
the Amended Class Action Complaint [ECF No. 90] (“Opposition” or “Opp.”).


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had engaged in “greenwashing,” Enviva’s stock price fell $7.74 per share. Id. The value of

Enviva’s stock fell even further as a result of a subsequent whistleblower article, which included

testimony from a former Enviva employee concerning Enviva’s false representations regarding its

environmental impact. Id. The plaintiff in that case alleged that certain Enviva officers were strictly

liable under Section 11 and Section 15 as signatories of the registration statements for material

misrepresentations and omissions contained therein. Id. at *3. In granting the defendants’ motion

to dismiss, this Court held that the plaintiff lacked standing to bring a Section 11 claim because

the facts alleged did not plausibly suggest that the plaintiff’s shares originated from the offering.

Id. at *19.

        Faced with the Court’s clear determination in Fanucchi, Plaintiffs’ Opposition attempts to

distinguish Fanucchi by arguing that Plaintiffs have alleged more than the Fanucchi plaintiff, such

as the amount of shares registered in the registration statement and the proportion of registered

shares available in the market prior to the secondary offering. (See Opp. at 15-17). But taken as

true for purposes of a motion to dismiss, Plaintiffs’ allegations still fail to sufficiently allege facts

for traceability. As in Fanucchi, Plaintiffs attempt to substantiate their allegations concerning their

purchases of shares “pursuant and/or traceable” to the Offering Documents with certifications from

the Lead Plaintiffs with the dates, number of shares, and prices of stock purchases. (See Compl. ¶¶

29-30, Exhibit A; DE 3-3). Plaintiffs’ allegations here, like Fanucchi, do not “plausibly suggest

that the shares Plaintiffs acquired must have originated” from the Offering Documents. Fanucchi,

2024 WL 3302564, at *18.


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        Plaintiffs also cannot distinguish their Complaint from that in Pirani v. Slack Techs., Inc.,

127 F.4th 1183 (9th Cir. 2025) (“Pirani II”),2 where the Ninth Circuit rejected the plaintiff’s

“statistical tracing” theory, which purportedly connected his shares to the defendant’s registration

statement. Id. at 1189-90. Specifically, in Pirani II, the plaintiff argued that he could “plausibly

allege that he purchased at least some registered shares” and show traceability by “relying on the

statistical inference that given the number of shares he purchased and the fraction of shares on the

exchange that were registered (about 42 percent), the likelihood that none of the 30,000 shares was

registered is infinitesimally small.” Id. at 1190 (internal citations omitted). The court found this

theory to be “both factually and legally flawed,” and noted that the theory of statistical tracing is

“contrary to [9th Circuit] precedent.” Id.

        Plaintiffs contend that they do not allege statistical tracing, (Opp. at 18), but their

Complaint says otherwise. Plaintiffs allege that “[g]iven the substantial increase in the volume of

shares being traded on June 21, 2024 and after August 9, 2025 . . . there is a high probability that

the shares Plaintiffs purchased after these dates were traceable to the Offering Documents.” (See

Compl. ¶¶ 422, 424) (emphasis added). Plaintiffs’ allegations track the statistical theory espoused

by the plaintiff in Pirani II, which the Ninth Circuit squarely rejected. See Pirani II, 127 F.4th at

1190.

        Plaintiffs further contend that “Defendants [have] concede[d] that Plaintiffs can establish

their standing by tracing the chain-of-title of the shares they purchased to the Offering

Documents.” (See Opp. at 10). Not so. Olivier simply acknowledges the two ways in which a

plaintiff can establish Section 11 standing: by (1) alleging a direct purchase in the offering covered


2
  Pirani v. Slack Techs., Inc., 13 F.4th 940, 951 (9th Cir. 2021) (“Pirani I”) was reversed and
remanded back to the Ninth Circuit by the Supreme Court in Slack Techs., LLC v. Pirani, 598 U.S.
759 (2023).


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by the registration statement, or (2) affirmatively tracing the chain of title of the securities back to

that offering. Def. Olivier’s Mot. to Dismiss [ECF No. 82] (“Mot.”) at 10 (citing Fanucchi, 2024

WL 3302564, at *18).3 In his Motion to Dismiss, Olivier explains how Plaintiffs fail to meet either

prong. First, though Plaintiffs allege that they purchased iLearningEngines common stock

“pursuant and/or traceable” to the Offering Documents, they concede that they purchased shares

“on the open market,” which undermines any allegation of a direct purchase in the offering covered

by Form S-1 or S-8. (See Compl. at ¶¶ 29-30; 423-424). Second, Plaintiffs’ speculative allegations

concerning secondary market purchases do not constitute affirmative tracing of their chain of title

back to the registration statement. (See id.); (Mot. at 10-11). For example, Plaintiffs assert that

Plaintiff Al Hamid and Plaintiff Leveque purchased shares when the shareholders who registered

shares through the Offering Documents were actively selling their shares (See Opp. at 14). But, as

Olivier points out in his Motion, that was not the case: Leveque purchased 5,000 shares on July

25, 2024—one month after the S-8 issued. (See id. ¶ 29; DE 3-3, at 3); (Mot. at 10-11). Al Hamid

purchased a total of 4,500 shares between August 20 and September 18, 2024—weeks to months

after the S-1 and S-8 issued—and sold 2,500 of them within the same time frame. (See Compl.,

Ex. A); (Mot. at 10-11).

          Date                           Event                                Significance
                                                                      Registered ~16M shares for
     June 21, 2024                Form S-8 Effective
                                                                        employee/director plans.
                             Leveque purchases 5,000                   Open market. Before S-1.
     July 25, 2024
                                      shares                            Over a month after S-8.
    August 9, 2024          Form S-1 Declared Effective            Registered ~131M shares for resale
                             Al Hamid purchases 500                 Open market. Months after S-8.
    August 20, 2024
                                      shares                                Weeks after S-1.

3
 Plaintiffs also attempt to distinguish Ciarciello v. Bioventus, Inc., 1:23-CV-32, 2023 WL 7300081
(M.D. N.C. Nov. 6, 2023), arguing that the plaintiff in Ciarciello “made only a bare bone assertion
of traceability.” (See Opp. at 17). For the reasons discussed as to Fanucchi, Plaintiffs’ allegations,
while not necessarily “bare bone,” still do not render the traceability conclusion plausible.


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       Case 8:24-cv-02900-DKC            Document 101         Filed 10/22/25       Page 6 of 9


                              Al Hamid purchases 500
   August 23, 2024                                                            Same as above.
                                       shares
                             Al Hamid purchases 1,000
   August 27, 2024                                                            Same as above.
                                       shares
                             Al Hamid purchases 1,000;
   August 30, 2024                                                   Same as above. Round-trip sale.
                                 sells 1,000 shares
                             Al Hamid purchases 1,500                Open market. Months after S-8.
 September 16, 2024
                                       shares                           Over a month after S-1.
 September 18, 2024          Al Hamid sells 1,500 shares               Sold majority of holdings.


Accordingly, as in Fanucchi, Plaintiffs’ allegations do not plausibly show the traceability of the

shares to the Offering Documents.

       As to Section 15 of the Securities Act, Plaintiffs merely allege that because they have

adequately alleged an underlying violation of Section 11, Plaintiffs state a claim under Section 15.

But, as Olivier states in his Motion, Plaintiff did not allege an underlying violation of Section 11,

which forecloses relief under Section 15. (See Mot. at 13).

 II.   Plaintiffs Fail to Establish That Olivier Is a Control Person Under Section 15.

       Plaintiffs argue they must do no more than “merely” allege that Defendants had the power

to control or influence a policy to establish Section 15 control person liability. (See Opp. at 22).

Notably, Plaintiffs omit Olivier from the list of persons whom they claim had the power. (See id.)

(“Thus, the Complaint must merely allege that Defendants Barger, Davis, Melham, and Moe had

“possession, direct or indirect, of the power to direct or cause the direction of the management and

policies of a person . . .”). Plaintiffs only mention Olivier in a footnote, arguing that one particular

allegation from their Amended Complaint “is applicable to Defendants Barger, Davis, Me[h]lman,

Moe, and Olivier.” (See Opp. at 23n.15.) In fact, Plaintiffs merely restate the control person-related

allegations made in their Amended Complaint as to the Individual Defendants, which includes Mr.

Olivier, but is not specific to him.


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       Regardless, this Court’s holding in In re Constellation Energy Grp., Inc. Sec. Litig., 738 F.

Supp. 2d 614 (D. Md. 2010), is directly on point. There, the lead plaintiff purchased common stock

of Constellation, a publicly traded energy company. Id. at 620. Weeks after the offering,

Constellation disclosed that it had miscalculated its collateral figures stated in the offering and had

a significant business relationship with a company that had just filed for Chapter 11 bankruptcy

protection—both disclosures that had caused Constellation’s stock price to fall. Id. at 621-22. The

plaintiffs argued that defendants (Constellation’s directors, officers, and underwriters) had failed

to make these disclosures to plaintiffs during the class period, along with other allegedly

misleading statements about Constellation’s future earnings, business outlook, risk management,

and internal controls, which gave rise to their Section 11 and Section 15 claims. Id. at 623.

       This Court dismissed the plaintiffs’ Section 15 claims because “[a]n individual’s position

alone does not establish control person liability,” and because the plaintiffs had not alleged that

the directors were directly involved in the day-to-day operations of the company. Id. at 639-40.

The Court noted that it could not “infer simply from the director defendants’ positions on

Constellation’s board of directors that they [had] exercised the requisite control over the specific

corporate operation that resulted in the miscalculated downgrade collateral obligations to be liable

under § 15.” Id. at 640; see also In re Creditrust Corp. Sec. Litig., 2002 WL 35691716, at *19 (D.

Md. Aug. 1, 2002) (dismissing Section 15 claims against outside directors where claims were

based only on title and conclusory allegations of control).4


4
  Plaintiffs cite In re Sourcefire, Inc. Sec. Litig., No. CIV. JFM 07-1210, 2008 WL 1827484 (D.
Md. Apr. 23, 2008), for the proposition that their allegations of control are sufficient to plead
control liability. But unlike the defendants in Sourcefire, Olivier did not have, and is not alleged
to have had, “a series of direct and/or direct indirect business and/or personal relationships with
other directors and/or officers and/or major shareholders” of iLearningEngines. Id. at *7.


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       Case 8:24-cv-02900-DKC           Document 101            Filed 10/22/25   Page 8 of 9


       As in Constellation Energy, Plaintiffs’ claims fail because they have brought Section 11

and Section 15 claims against Olivier based on allegedly misleading statements or omissions

without plausibly alleging that Olivier is a control person liable under Section 15. As established

in Olivier’s Motion, Plaintiffs’ general allegations of control by the Individual Defendants do not

suffice to render Olivier a control person because they include no facts specific to Olivier: neither

Olivier’s position as an independent director of iLearningEngines nor his signing of the Forms S-

1 and S-8 renders him a control person, and Plaintiffs do not allege Olivier’s direct involvement

in iLearningEngines’ day-to-day operations. See Constellation Energy Grp., 738 F. Supp. 2d at

638-40. Nor do Plaintiffs allege that Olivier influenced or controlled any specific Defendant

alleged to have violated Section 11. (See id.); (Mot. at 15).

       Plaintiffs fail to establish that Olivier is a control person under Section 15.

                                         CONCLUSION

       For the reasons set forth herein, Defendant Thomas Olivier respectfully requests that the

Court grant his Motion and issue an Order dismissing with prejudice Counts I and II against him

in the Amended Complaint.

                                              Respectfully submitted,

Dated: October 22, 2025                By:    /s/ _Jorge L. Piedra _______
                                              Jorge L. Piedra (Pro Hac Vice)
                                              Rasheed K. Nader (Pro Hac Vice)
                                              Alexa G. Chinchilla (Pro Hac Vice)
                                              KOZYAK TROPIN THROCKMORTON
                                              2525 Ponce de Leon Blvd., Floor 9
                                              Coral Gables, Florida 33134
                                              (305) 372-1800 (phone)
                                              [email protected]
                                              [email protected]
                                              [email protected]

                                              Counsel for Defendant Thomas Olivier


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      Case 8:24-cv-02900-DKC          Document 101        Filed 10/22/25      Page 9 of 9


                                            /s/ __________
                                            Philip A. Selden (Bar No. 28596)
                                            Alicia L. Shelton (Bar No. 11538)
                                            Cole Schotz P.C.
                                            1201 Wills Street, Suite 320
                                            Baltimore, Maryland 21231
                                            (410) 528-2987 (phone)
                                            (410) 528-9407
                                            [email protected]
                                            [email protected]

                                            Counsel for Defendant Thomas Olivier


                               CERTIFICATE OF SERVICE

       I hereby certify that, on this 22nd day of October 2025, a copy of the foregoing was served

on counsel of record via the Court’s CM/ECF system.

                                                        /s/ _ _______
                                                        Alicia L. Shelton


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