The U.S. Court of Appeals for the Ninth Circuit affirmed a district court’s partial grant of summary judgment in favor of plaintiff, the Securities and Exchange Commission, finding that defendants violated Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 by issuing a fraudulent press release.

The SEC alleged that defendants’ press release, which stated that a new technology system was being “unveiled,” was false because at the time the press release was issued, the company had no prototypes for the system built, or even the money to build one. The district court granted summary judgment for the SEC on this claim.