Glenfeed Inc. Case Brief

Plaintiffs making a claim under Rule 10b-5 must plead scienter by “stat[ing] with particularity facts giving rise to a strong inference that the defendant acted with the required state of mind.” Livid, 403 F.3d at 1055 (internal quotation marks omitted). The higher pleading standards incorporates the scienter standard in the federal rules that requires the circumstances constituting the fraud be pled with particularity, but allows the plaintiff to plead the state of mind generally. Fed. R. Civ. P. 9(b). The particularity requirement is met by pleading facts about the “times dates, places or other details of the alleged fraudulent involvement of the actors,” which gives rise to a strong inference of fraudulent intent. In re GlenFed Inc. Sec. Litig., 11 F.3d 843, 847-48 (9th Cir. 1993) (internal quotation marks omitted); see also Time Warner, 9 F.3d at 263 (requiring the identity
The emails form the Code Rag report give the time, dates, places, and other information in connection with Bachman’s press release show that Piper knew the risk their product was at fault and worried Piper could be the next Samsung showing they knew the potential consequences if the news went public. Further, the Code Rag report explicitly gives a theory of fraud that Piper wanted to raise more money in its IPO. Finally, although addressed in an adjudication that did not require scienter, the duty to go beyond normal procedures could be construed to hold that even though Hendricks did not know Piper’s phone were the actual cause, he had a duty to consult more than one lawyer who spent only a few hours on the problem on whether information from the report needed to be disclosed. Therefore, Plaintiffs first claim should be dismissed, but their second should be allowed to proceed since there are enough facts to demonstrate a strong inference of