"In a prior round of pleadings challenges, the Court dismissed without prejudice WSGI's claims for intentional misrepresentation, fraud in the inducement, and securities fraud for failure to satisfy the heightened pleading requirments of Federal Rule of Civil Procedure 9(b), and also dismissed without prejudice WSGI's claim for breach of fiduciary duty. Dkt. No. 36. WSGI amended its complaint to try to save these claims but the amendments are not enough. They are now dismissed with prejudice. WSGI's claim for breach of contract, breach of the covenant of good faith and fair dealing, and under the California Unfair Competition Law will go forward."
"Because WSGI has failed to adequately allege the fiduciary duty claim after two opportunities, it is dismissed with prejudice."
"These statements do nothing to support WSGI’s fraud claims because the ink was already dry on the deal documents by the time they were allegedly made, and consequently WSGI could not have relied upon them as a basis for entering into the contracts or relationship."
"The alleged fraudulent scheme is that La Jolla bought WSGI’s shares at a deep discount and short sold those shares “to manipulate the stock prices to their advantage.” Dkt. No. 38 at 57. Short selling stock, however, requires that the seller borrow shares for a certain period of time and then return them. See United States v. Deeb, 175 F.3d 1163, 1165 n.4 (9th Cir. 1999) (explaining that in a “short sale, an investor contacts his broker and borrows a particular stock from the broker and sells it on the open market. The investor receives the proceeds from the sale and then has a certain amount of time within which to return the borrowed stock to the broker.”) The amended complaint neither alleges that La Jolla borrowed stock from WSGI and subsequently returned it, nor provides any specific details about how La Jolla allegedly manipulated WSGI’s stock price, aside from the details about La Jolla’s history of funding under the Agreements."
"Even considering the complaint as a whole, WSGI has failed to plead the existence of a strong inference that anyone at La Jolla acted with deliberate or conscious recklessness in allegedly purchasing and selling WSGI’s shares. The Court dismisses this cause of action with prejudice, as WSGI has had two opportunities to plead this claim."
A civil matter which is "dismissed with prejudice" is over forever. This is a final judgement, not subject to further action, which bars the plaintiff from bringing any other lawsuit based on the claim.
