Facts

This matter consolidated multiple securities class actions, alleging that defendants unlawfully traded on non-public material information. The court granted defendants' motion to dismiss with leave to amend. A Second Amended Complaint was filed, and defendants moved to dismiss for failure to state a claim.

PLAINTIFF'S CONTENTIONS: The complaint alleged that defendants illegally traded on material, non-public information about Intelsat S.A., a satellite company, just before the stock took a massive plunge.

DEFENDANT'S CONTENTIONS: Defendants moved to dismiss the complaint, arguing that the allegations did not satisfy the heightened pleading requirements of SEC Rule 10b-5. Under these requirements, pleadings of fraud must "state with particularity" facts giving rise to a strong inference that a defendant acted with the required state of mind, i.e., intent to deceive or defraud. Further, because the complaint relied on confidential witnesses, their statements were required to be described with sufficient particularity to establish their reliability and personal knowledge, as well as to be indicative of the intent to defraud.

Result

The case was dismissed.