City of Dearborn Heights Act 345 Police & Fire Retirement Sys. v. Inter-Local Pension Fund GCC/IBT, 10-1514
City of Dearborn Heights Act 345 Police & Fire Retirement Sys. v. Inter-Local Pension Fund GCC/IBT, 10-1514, concerned plaintiffs' securities fraud class action under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Securities Exchange Commission Rule 10b-5, claiming that defendants intentionally or recklessly failed to disclose a March 2007 change in Japanese regulations that predictably reduced demand for defendants' products and services in Japan.
In affirming the district court's dismissal of the action for failing to meet the strong inference of scienter standard set forth in the Private Securities Litigation Reform Act of 1995 (PSLRA), the court held that, although it is a fair inference, and defendants do not themselves dispute that they had knowledge of the regulatory change at least at some time earlier in the class period, this is not enough to meet plaintiff's burden and scienter. The court also held that the stock sales by the executives do not offer the requisite support for a strong inference of scienter, either standing alone or in combination with the other evidence.
- Read the First Circuit's Full Decision in City of Dearborn Heights Act 345 Police & Fire Retirement Sys. v. Inter-Local Pension Fund GCC/IBT, 10-1514
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