Harris v. Ivax Corp. case brief summary
182 F.3d 799 (1999)
CASE FACTS
Plaintiffs, investors hoping to represent a class of purchasers of defendant corporation's stock, sued defendant, its chairman and chief executive officer, and its chief financial officer, upon the claim that defendants had committed fraud under the Securities Exchange Act, 15 U.S.C.S. § 78j and Securities and Exchange Commission Rule 10b-5, 17 C.F.R. § 240.10b-5. The alleged fraud arose from statements made in press releases issued by defendant. One press release at issue, while acknowledging business problems, also showed some optimism. Another release announced anticipated losses. Defendant subsequently announced a much larger actual loss. The trial court dismissed plaintiffs' complaint under Fed. R. Civ. P. 12(b)(6).
DISCUSSION
CONCLUSION
The dismissal of a complaint filed by plaintiffs that had alleged the fraudulent issuance of economic projections on the part of defendant was affirmed because the statements at issue fell within the safe harbor provision of the Private Securities Litigation Reform Act for forward looking statements.
Suggested Study Aids For Securities Regulation Law
Securities Regulation in a Nutshell, 10th (Nutshell Series)
Securities Regulation: Examples & Explanations, 5th Edition
Securities Regulations: The Essentials
182 F.3d 799 (1999)
CASE SYNOPSIS
Plaintiffs, investors hoping to
represent a class of purchasers of defendant corporation's stock,
sought review of the judgment of the United States District Court for
the Southern District of Florida, which dismissed plaintiffs'
complaint, alleging fraud on the part of defendant under the
Securities Exchange Act, 15 U.S.C.S. § 78j and Securities
and Exchange Commission Rule 10b-5, 17 C.F.R. § 240.10b-5,
pursuant to Fed. R. Civ. P. 12(b)(6).CASE FACTS
Plaintiffs, investors hoping to represent a class of purchasers of defendant corporation's stock, sued defendant, its chairman and chief executive officer, and its chief financial officer, upon the claim that defendants had committed fraud under the Securities Exchange Act, 15 U.S.C.S. § 78j and Securities and Exchange Commission Rule 10b-5, 17 C.F.R. § 240.10b-5. The alleged fraud arose from statements made in press releases issued by defendant. One press release at issue, while acknowledging business problems, also showed some optimism. Another release announced anticipated losses. Defendant subsequently announced a much larger actual loss. The trial court dismissed plaintiffs' complaint under Fed. R. Civ. P. 12(b)(6).
DISCUSSION
- The lower court's dismissal of the complaint was affirmed on appeal because all of the statements that the plaintiffs claimed to be false or misleading were forward-looking and accompanied by meaningful cautionary language.
- Therefore, the statements at issue fell within the safe harbor provision of the Private Securities Litigation Reform Act of 1995, 15 U.S.C.S. § 78u-5(c)(1).
- Therefore, defendants were shielded from liability.
CONCLUSION
The dismissal of a complaint filed by plaintiffs that had alleged the fraudulent issuance of economic projections on the part of defendant was affirmed because the statements at issue fell within the safe harbor provision of the Private Securities Litigation Reform Act for forward looking statements.
Suggested Study Aids For Securities Regulation Law
Securities Regulation in a Nutshell, 10th (Nutshell Series)
Securities Regulation: Examples & Explanations, 5th Edition
Securities Regulations: The Essentials
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