Plastic2Oil Inc (PTOI)

[loanranger]

There's no need to link any further cases. I believe that we generally agree on the law.

But:
"the same principles apply with respect to the company."
In the case cited, the complaint against the auditor (Price Waterhouse) was dismissed for lack of scienter. The cases against the company (Altris Software), however, went forward and were eventually settled. Note that the settlement describes PW as a "non-settling" defendant.
http://www.gilardi.com/pdf/asinot.pdf



"Both were securities fraud class action cases in the Ninth Circuit; both cases held that a violation of GAAP, standing alone, is insufficient to show scienter"

Clearly, in the JBI case, the plaintiff does not intend to rely solely on an allegation that the financial statements in question aren't compliant with GAAP. I'll repeat the list provided previously as a reminder:
"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."
There should be little doubt that the other 4 items above will also be established as fact and known to at least one of the defendants.



"The allegations you noted that are set forth in Paragraph 51 of the complaint are not "particular facts giving rise to a strong inference" that the defendant acted with the requisite state of mind, as required by statute."

Obviously, what they do allege will require evidence to prove, as I stated immediately following my summary of Paragraph 51:
"I don't know how they are going to prove that stuff......items 2 and 3 are obviously easily established, 1 and 4 will require documents and testimony that I don't think the public has seen."


I don't see how the issue of scienter will stop the case from going forward.