A district court granted defendants’ motion to dismiss plaintiffs’ claim for securities fraud on the ground that the complaint failed to plead fraud with particularity, as required by the Private Securities Litigation Reform Act of 1995 (PSLRA).
In September 2009, individual defendants allegedly represented to plaintiff Dupont, then president and chief executive officer of defendant Freight Feeder, that they had obtained investors in one of Freight Feeder’s programs, and that they would need to assume control of Freight Feeder to secure additional venture capital. As a result, Dupont agreed to a buyout agreement pursuant to which he surrendered his interest in, and control of, Freight Feeder in exchange for an up-front payment of $12,000 and monthly payments of $12,000 in each of the 36 months following the closing of the buyout agreement.
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