Justia Securities Law Opinion Summaries

Plaintiff brought this securities fraud action against defendant, a biotechnology company and several of its officers, alleging that, by misstating and failing to disclose safety information about two of the company's products used to treat anemia, they violated the Securities and Exchange Act of 1934, 15 U.S.C. 78j(b), 78t(a), and Rule 10b-5, 17 C.F.R. 240.10b-5. At issue was what a plaintiff must do to invoke a fraud-on-the-market presumption in aid of class certification. The court joined the Third and Seventh Circuits in holding that plaintiff must (1) show that the security in question was traded in an efficient market, and (2) show that the alleged misrepresentation were public. As for the element of materiality, plaintiff must plausibly allege that the claimed misrepresentations were material. In this case, plaintiff plausibly alleged that several of defendants' public statements about its pharmaceutical products were false and material. Coupled with the concession that the company's stock traded in an efficient market, this was sufficient to invoke the fraud-on-the-market presumption of reliance. Therefore, the district court did not abuse its discretion in certifying the class. View "Connecticut Retirement Plans and Trust Funds v. Amgen Inc., et al." on Justia Law

The Mississippi Public Employees' Retirement System filed a class action, claiming that senior management of a publicly traded manufacturer of medical devices in which it invested, withheld material information and made misleading statements about devices for treating coronary artery disease, in violation of the Securities Exchange Act of 1934, 15 U.S.C. 78j(b), 78t(a), and Securities Exchange Commission Rule 10b-5, 17 C.F.R. 240.10b-5. In an earlier opinion, the First Circuit reversed dismissal, finding that the inference of scienter advanced by the plaintiff was at least as cogent and compelling as the contrary inference, satisfying the "strong inference" pleading standard of the Private Securities Litigation Reform Act. After discovery, the district court entered summary judgment in favor of defendants. The First Circuit affirmed, finding that plaintiff did not produce evidence that would support a reasonable inference of scienter. Given the statements and disclosures that defendants did make concerning the devices, they had no obligation to disclose the fact that they were working on an improvement that would reduce the very small number of no-deflate complaints that they received, and of which the market was aware. View "MS Pub.Emps. Ret. Sys. v. Boston Scientific Corp." on Justia Law