Berson v. Applied Signal Technology

9th Circuit Decision Reversing Dismissal of Case

more+
less-

The 9th Circuit decided that plaintiffs stated a claim of securities fraud for defendant's rosy reports of high "backlog" that failed to disclose the existence of multiple government stop-work orders on the very contracts making up the backlog. The Appellate Court also held it was proper to infer that the defendants knew or recklessly disregarded information about the stop-work orders because of their high-level positions with the company, coupled with the substantial impact of the stop-work orders. Finally, the Court reversed the District Court's finding that Defendants' backlog statements were entitled to protection under the statutory "safe harbor" for "forward-looking" statements. 15 U.S.C. Sec. 78u-5(c). The 9th Circuit held that backlog is "a snapshot of how much work the company has under contract right now, and descriptions of the present aren't forward-looking."

LOADING PDF: If there are any problems, click here to download the file.

Written by:

Published In:

Reference Info:Decision | Federal, 9th Circuit, California | United States

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Izard Nobel LLP | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »

All the intelligence you need, in one easy email:

Great! Your first step to building an email digest of JD Supra authors and topics. Log in with LinkedIn so we can start sending your digest...

Sign up for your custom alerts now, using LinkedIn ›

* With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name.
×
Loading...
×