114 F.3d 1410 (1997)
Defendants, a publicly traded corporation and its officers, announced the corporation's annual performance results after the close of the fiscal year, which results were below the investment community's expectations and which resulted in a sharp decline in the corporation's stock price. Plaintiff investor class filed claims against defendants under §§ 10(b) and 20(a) of the Securities Exchange Act of 1934, 15 U.S.C.S. §§ 78j(b), 78(t)(a). Plaintiff claimed that defendants made earnings overstatements, failed to disclose purchases of inventory without the usual discounts, made sales overstatements, and made certain misrepresentations of earnings forecasts. The district court dismissed all claims for failure to state a claim for which relief could be granted and for failure to plead fraud with specificity and denied plaintiff's motion for leave to amend.
- On appeal, the court affirmed dismissal of all claims, but held that the first and fourth categories of claims were dismissed solely for failure to plead fraud with specificity.
- Therefore the court reversed the district court's denial of plaintiff's motion for leave to amend as to the first and fourth categories of claims.
Dismissal of the federal securities law claims of plaintiff investor class against defendants, a publicly traded corporation and its officers, was reversed in part and affirmed in part. The court held that plaintiff failed to state claims on which relief could be granted and failed to plead those claims with adequate particularity, but ruled that plaintiff must be allowed to amend the claims that were dismissed solely on the latter ground.
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