Nice link. I learned a lot from it. But it wasn't quite on point.
"In Dura Pharmaceuticals, Inc. v. Broudo,[2] the Supreme Court said that shareholders cannot base a securities fraud suit merely on the theory that they bought their shares at an artificially inflated price due to a company misstatement. Rather, they must show some clear link between the misrepresentation and the actual decline in the stock price."
The above case provided the basis for the article and it dealt with forward looking statements:
"The class action suit was brought by shareholders who had bought Dura stock between April 1997 and February 1998 a time when both Dura’s stock and the stock market as a whole were rising. The shareholders contended that Dura made a number of positive, but false, statements during that time about the prospects for one of its products and about the company’s sales."
The court said that the plaintiffs couldn't tie the
"inflated" price that they bought at to the company statements and so the suit couldn't be brought.
The JBI class action suit isn't based on forward looking statements, but rather it's based misrepresentations of existing facts.
"Specifically, Defendants made false and/or misleading statements and/or failed to disclose: (1) that the media credits acquired by the Company in connection with the acquisition of JavaCo were substantially overvalued; (2) that the Company was improperly accounting for acquisitions; (3) that, as such, the Company’s financial results were not prepared in accordance with Generally Accepted Accounting Principles (“GAAP”); (4) that the Company lacked adequate internal and financial controls; and (5) that, as a result of the above, the Company's financial statements were materially false and misleading at all relevant times."
IMO the bases for the claims are materially different from those in the article.
I'm tryin ta think but nuttin happens......Curly
