IN RE FARFETCH LIMITED SECURITIES LITIGATION — Entry #86: OPINION & ORDER re: 79 MOTION to Dismiss the Second Amended Class Action Complaint

Case 1:23-cv-10982-ER              Document 86          Filed 09/29/26         Page 1 of 39


UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK


    IN RE FARFETCH LIMITED                                         OPINION & ORDER
    SECURITIES LITIGATION
                                                                       23-cv-10982 (ER)


RAMOS, D.J.:

           Co-/HDG3ODLQWL൵V)HUQDQGR6XOLFKLQDQG<XDQ]KH)X FROOHFWLYHO\³3ODLQWL൵V´ 

EULQJWKLVSXWDWLYHFODVVDFWLRQDJDLQVW )DUIHWFK /LPLWHG ³)DUIHWFK´ RUWKH³&RPSDQ\´)

DQGLWVGLUHFWVXEVLGLDU\))5HDOLVDWLRQVSOF IND )DUIHWFK +ROGLQJVSOF  ³))

+ROGLQJV´ DQGLQGLYLGXDOV-RVp0DQXHO)HUUHLUD1HYHV ³1HYHV´ (OOLRW*LOEHUW-RUGDQ

    ³-RUGDQ´ DQG6WHSKDQLH1DGLnH3KDLU.RRLM ³3KDLU´  FROOHFWLYHO\³'HIHQGDQWV´ 

DOOHJLQJYLRODWLRQVRI6HFWLRQV  E DQG D RIWKH6HFXULWLHV([FKDQJH$FWDQG

6HFXULWLHVand ([FKDQJH&RPPLVVLRQ ³6(&´ 5XOHE-5. 6SHFL¿FDOO\WKH6HFond

Amended &ODVV$FWLRQ&RPSODLQW ³6$&´ 1 DOOHJHV WKDW'HIHQGDQWVmade PDWHULDOO\
                                                     0F


IDOVHRUPLVOHDGLQJVWDWHPHQWVRPLWWHGPDWHULDOIDFWVDQGFDUULHGRXWDVFKHPHWR

GHFHLYHLQYHVWRUV LQRUGHUWRDUWL¿FLDOO\LQÀDWH)DUIHWFKVWRFNSULFHV LQYLRODWLRQRI

Section 10(b) RIWKH6HFXULWLHV([FKDQJH$FW and 6(&5XOH10b-DQGWKDW1HYHV

-RUGDQDQG3KDLU FROOHFWLYHO\³,QGLYLGXDO'HIHQGDQWV´ ZHUHFRQWUROOLQJSHUVRQV

RI )DUIHWFK 2 DQG))+ROGLQJV, violated Section 20(a) RIWKH6HFXULWLHV([FKDQJH$FW, and
               1F


DUHFXOSDEOHSDUWLFLSDQWVLQWKHDOOHJHGIUDXG. %HIRUHWKHCRXUWLVWKH,QGLYLGXDO

'HIHQGDQWV¶PRWLRQWRGLVPLVVWKH6$&. DocV. 79 and 82. )RUWKHUHDVRQVVHWIRUWK

EHORZWKHPRWLRQLVGRANTED.


1
    8QOHVVRWKHUZLVHQRWHGFLWDWLRQVWR³ˆB´UHIHUWRWKH6HFRQG$PHQGHG&ODVV$FWLRQ&RPSODLQW'RF
2
 %\DQ2UGHURIWKH8QLWHG6WDWHV%DQNUXSWF\&RXUWIRUWKH'LVWULFWRI'HODZDUHGDWHG$XJXVW 5, 2024, all
SHQGLQJDFWLRQVDJDLQVW )DUIHWFK DUHVWD\HG


     Case 1:23-cv-10982-ER         Document 86        Filed 09/29/26      Page 2 of 39


I.     BACKGROUND
          A. Factual Background
       ๠HEDFNJURXQGLVGUDZQIURPIDFWXDODOOHJDWLRQVLQWKH6$&Ashcroft v. Iqbal,

86 
 GRFXPHQWVDWWDFKHGWRWKHFRPSODLQWDVH[KLELWVDQG

GRFXPHQWVLQFRUSRUDWHGE\UHIHUHQFHWKHUHLQDiFolco v. MSNBC Cable L.L.C., 622 F.3d

104, 111 (2d &LU ๠H&RXUWDFFHSWVDOOZHOO-SOHDGHGIDFWXDODOOHJDWLRQVDVWUXH

Id. ๠H&RXUWDVVXPHVIDPLOLDULW\ZLWKWKHIDFWVSUHVHQWHGLQWKHSUHYLRXVRSLQLRQV and

RUGHUV LQWKLVFDVH. See DocV. 73 JUDQWLQJ WKH ,QGLYLGXDO'HIHQGDQWV¶¿UVWmotion to

GLVPLVV , 85 GHQ\LQJ3ODLQWL൵V¶PRWLRQWRPRGLI\WKH3ULYDWHSHFXULWLHVLLWLJDWLRQ

RHIRUPAFW ³36/5$´ DXWRPDWLFGLVFRYHU\VWD\). )RUSUHVHQWSXUSRVHVWKH&RXUW

SURYLGHVDQDEEUHYLDWHGVXPPDU\RIWKH UHOHYDQWIDFWVKHUHLQ

       ๠LVLVDIHGHUDOVHFXULWLHVFODVVDFWLRQODZVXLWEURXJKWRQEHKDOIRIVKDUHKROGHUV

ZKRSXUFKDVHG )DUIHWFKVHFXULWLHVEHWZHHQ'HFHPEHUDQG'HFHPEHU

WKH³&ODVV3HULRG´  ˆ 3ODLQWL൵VDOOHJHWKDW'HIHQGDQWVPDGHPDWHULDOO\IDOVHRU

PLVOHDGLQJVWDWHPHQWVRPLWWHGPDWHULDOIDFWVDQGGHFHLYHGLQYHVWRUVLQRUGHUWR

DUWL¿FLDOO\LQÀDWH )DUIHWFKVWRFNSULFHVLQYLRODWLRQRISection 10(b) and 5XOH 10b-5,

ˆˆ 216–17, DQGWKDW1HYHV-RUGDQDQG3KDLU, DVFRQWUROOLQJSHUVRQVRI )DUIHWFKand FF

+ROGLQJV, violated Section 20(a), ˆ26.

       )DUIHWFKZDV IRXQGHGLQaVDWHFKQRORJ\FRPSDQ\ VXSSRUWLQJ WKLUG-SDUW\
VDOHVRIOX[XU\JRRGVWRFRQVXPHUVZRUOGZLGHYLDLWVGLJLWDOPDUNHWSODFHSODWIRUP ˆ 2.

)DUIHWFKRSHUDWHGDVDSULYDWHFRPSDQ\IRURYHUten \HDUVEHIRUHODXQFKLQJLWVLQLWLDO

SXEOLFR൵HULQJ ³,32´ LQ6HSWHPEHUZLWKVKDUHVOLVWHGRQWKH1HZ<RUN6WRFN

([FKDQJH ³1<6(´  Id. PULRUWRWKH,32RQ0D\³)DUIHWFK/LPLWHGZDV

LQFRUSRUDWHGXQGHUWKHODZVRIWKH&D\PDQ,VODQGVWREHFRPHWKHKROGLQJFRPSDQ\RI

)DUIHWFKFRP/LPLWHGDQGLWVVXEVLGLDULHV´ˆPlainti൵VDOOHJHWKDW )DUIHWFK

SURPRWHGLWVHOIWRLQYHVWRUVEDVHGRQLWV³ORZULVNKLJKPDUJLQ´WKLUG-SDUW\PDUNHWSODFH

SODWIRUPGHVLJQ ˆ, 36. 3ODLQWL൵VFRQWHQGWKDWDVDUHVXlt, )DUIHWFKDFKLHYHGD


                                             2


    Case 1:23-cv-10982-ER          Document 86        Filed 09/29/26      Page 3 of 39


VXFFHVVIXO,32WKDWUDLVHGELOOLRQDQGOHGWRDQELOOLRQYDOXDWLRQ ˆ. 3ODLQWL൵V

DVVHUWWKDW³VHHPLQJO\RYHUQLJKW´WKH&RPSDQ\DEDQGRQHGWKLVEXVLQHVVPRGHOVKLIWLQJ

LQVWHDGWRD³JURZWK-E\-DFTXLVLWLRQ´VWUDWHJ\IRFXVLQJRQ³DFTXLVLWLRQV RI¿UVW-SDUW\

UHWDLOHUVDQGZKROHVDOHGLVWULEXWRUV´WRWDOLQJELOOLRQ Id. 6SHFL¿FDOO\)DUIHWFK

SXUFKDVHG6WDGLXP*RRGVD¿UVW-SDUW\UHWDLOHU IRUPLOOLRQ RQ'HFHPEHU,

7RSOLIH, DOX[XU\H-FRPPHUFHSODWIRUP IRUPLOOLRQRQ)HEUXDU\
DQG1HZ

*XDUGV*URXS ³NGG´)DOX[XU\IDVKLRQFRQJORPHUDWH, IRUPLOOLRQ RQ$XJXVW

2019. ˆ39. )ROORZLQJWKHVHDFTXLVLWLRQV)DUIHWFKUHRUJDQL]HGLWVFRUSRUDWHVWUXFWXUH

into WKUHHJURXSV
  WKHdLJLWDOSODWIRUPKDQGOLQJWKLUG- DQG¿UVW-SDUW\WUDQVDFWLRQV  

WKHbUDQGSODWIRUPKDQGOLQJSURGXFWLRQDQGGLVWULEXWLRQRIWKHEUDQGVRZQHG and

OLFHQVHG E\1**DQG  in-VWRUHKDQGOLQJEULFN-and-PRUWDUVWRUHVˆ

       7R¿QDQFHWKLVVWUDWHJ\)DUIHWFKWRRNRQVXEVWDQWLDOGHEWLQFOXGLQJELOOLRQ

in 2020. ˆ3. 6SHFL¿FDOO\LQ)HEUXDU\, )DUIHWFKLVVXHGDQGVROGPLOOLRQLQ

FRQYHUWLEOHVHQLRUQRWHV LQ$SULOPLOOLRQLQFRQYHUWLEOHVHQLRUQRWHVDQGLQ

1RYHPEHUPLOOLRQLQFRQYHUWLEOHVHQLRUQRWHVˆˆ 46–48.

       3ODLQWL൵VDOOHJHWKDWEHJLQQLQJLQWKH&29,'-
SDQGHPLFDQGWKHVSLNHLQ

online VKRSSLQJ³SURYLGHGDIDoDGHRISUR¿WDELOLW\´ZKLOHPDVNLQJWKHWUXHH[WHQWRIWKH

QHJDWLYHLPSDFWRIWKHVH DFTXLVLWLRQV. ˆ 3ODLQWL൵VDUJXHWKDWWKHVHDFTXLVLWLRQVOHGWR

LQH൶FLHQFLHVLQFOXGLQJRYHUODSSLQJEXVLQHVVXQLWV, XQVXVWDLQDEOHRSHUDWLQJH[SHQVHV

UHODWLQJWRH[FHVVLQYHQWRU\DQGODUJHXSIURQW9DOXH$GGHG7D[ ³9$7´ REOLJDWLRQVDQG

KHDY\GLVFRXQWVOHDGLQJWRORZSUR¿WPDUJLQV Id. 3ODLQWL൵V DOOHJHWKDW )DUIHWFKZDV

QHDULQJDOLTXLGLW\FULVLVDQGSRWHQWLDOEDQNUXSWF\VXVWDLQHGRQO\E\GHEW¿QDQFLQJ,

ZKLFKZDVUDSLGO\GHSOHWLQJ. Id.

       )DUIHWFKIDLOHGWRPHHW LWV H[SHFWDWLRQVIRU WKHWKLUGTXDUWHURI ³Q3 2021´

DQGORZHUHGLWVSURMHFWLRQVIRU4 2021ˆ53. )DUIHWFKIDFHGIXUWKHUFKDOOHQJHVZKHQit

FHDVHGRSHUDWLRQVLQ5XVVLD ZKLFKDFFRXQWHGIRURILWVVDOHV, IROORZLQJ5XVVLD¶V

LQYDVLRQRI8NUDLQH, ˆ, and XSRQWKHGHDWKRI9LUJLO$EORKWKHIRXQGHUDQGFUHDWive

                                              3


    Case 1:23-cv-10982-ER           Document 86        Filed 09/29/26       Page 4 of 39


GLUHFWRURI2൵-:KLWHDIDVKLRQEUDQGZKLFKFRQWULEXWHG DQHVWLPDWHG-RI1**¶V

VDOHV, ˆ๠HVHHYHQWV led tRZHDNSHUIRUPDQFHLQERWK4DQG4OHDGLQJ

)DUIHtFKWRORZHULWVJXLGDQFHIRUWKH¿VFDO\HDU ³)<´ . ˆˆ 56, 59–60.

       1RQHWKHOHVV)DUIHWFKFRQWLQXHG PDNLQJ DGGLWLRQDODFTXLVLWLRQVDQGVWUDWHJLF

LQYHVWPHQWVLQˆ3. ,QWKH¿UVWKDOIRI)DUIHWFKDFTXLUHGEHDXW\UHWDLOHU

9LROHW*UH\IRUDSSUR[LPDWHO\6 million LQWRWDODVVHWV, ˆ63, 1**SDUWQHUHGZLWK

$GLGDVWREULQJWRPDUNHWOX[XU\FROODERUDWLRQVZLWK5HHERNFRPPLWWLQJWRPLQLPXP

UR\DOW\SD\PHQWV RIDSSUR[LPDWHO\PLOOLRQRYHU\HDUV, ˆDQG)DUIHWFK

LQYHVWHGPLOOLRQLQ1HLPDQ0DUFXV*URXSˆ. 'XULQJWKH4LQYHVWRUcall,

NeveVVWDWHGWKDWWKH&RPSDQ\ZDVORRNLQJWRUHGXFHKHDGFRXQWDQGPDUNHWLQJH[SHQVHV

to FXWFRVWVGULYHQE\LQH൶FLHQF\ˆ)DUIHWFK¶VSULPDU\RSHUDWLQJVXEVLGLDU\HQWHUHG

LQWRDPLOOLRQFUHGLWDJUHHPHQWLQ2FWREHUZKLFKZDVH[SDQGHGE\DQ

DGGLWLRQDOPLOOLRQLQ$XJXVW ˆ3ODLQWL൵Vclaim WKDWOHDGLQJXSWRDQG

WKURXJKWKH&ODVV3HULRG )DUIHWFKJDYHWKHLPSUHVVLRQ WKDWLWZDV¿QDQFLDOO\VHFXUH, ˆ 4,

DQGWKDWLWV ¿QDQFLDOVVXSSRUWHGIXWXUH JURZWKDLPHGDWUHWXUQLQJWRSUR¿WDELOLW\DQG

SRVLWLYHIUHHFDVKÀRZ, ˆ

       3ODLQWL൵VDOOHJHKRZHYHUWKDWLQ'HFHPEHU )DUIHWFKVHFUHWO\initiated

³3URMHFW$WKHQD´DQH൵RUWWRSXUVXHDWDNH-SULYDWHRUVLPLODUWUDQVDFWLRQZKLFKWKH\GLG

not GLVFORVH WRLQYHVWRUV. ˆ6. 3ODLQWL൵VDOOHJHWKDWWKLVSODQGHYROYHGLQWRDQH൵RUW³WR

VHFXUHDQHDU-LGHQWLFDOIXWXUHIRUWKH)DUIHWFK%XVLQHVVIUHHRIWKH¿QDQFLDOREOLJDWLRQV

DQGOLDELOLWLHVKHOGE\WKHSXEOLFHQWLW\)DUIHWFK´ ˆ
0. 'HVSLWHLWVH൵RUWV)DUIHWFKZDV

QRWDEOHWRVHFXUHWKHQHFHVVDU\FDSLWDOE\WKHIDOORI ˆ
,QUHVSRQVHWKH

&RPSDQ\SODQQHGWRGLVSRVHRI)DUIHWFKVWRFN and VHFXUHDIXWXUHIRUWKHEXVLQHVV. Id.

3ODLQWL൵VDOOHJHWKDW)DUIHWFKIRUPHGDVSHFLDOFRPPLWWHHDQGSXUVXHGDVDOHRILWV DVVHWV

LQDVLQJOHWUDQVDFWLRQUHVXOWLQJLQWKHZULWH-R൵RIELOOLRQLQGHEW ˆ

       3ODLQWL൵VDOOHJHWKDWXQWLO$XJXVWZKLOH)DUIHWFKHQJDJed LQ3URMHFW$WKHQD

'HIHQGDQWVPDGHQXPHURXVUHSUHVHQWDWLRQVWRWKHPDUNHWVXJJHVWLQJWKHFRPSDQ\

                                               4


    Case 1:23-cv-10982-ER           Document 86         Filed 09/29/26       Page 5 of 39


PDLQWDLQHGDVWURQJ¿QDQFLDOSRVWXUH ˆ6–7. 3ODLQWL൵VDOOHJHWKDW'HIHQGDQWVWRRNVWHSV

WRFRQFHDOWKH&RPSDQ\¶VJURZLQJOLTXLGLW\FULVLV WRHQVXUHFRQWLQXHGDFFHVVWR¿QDQFLQJ

DQGSURSXSWKHVWRFNSULFHRI)DUIHWFKORQJHQRXJKWR VHFXUHDIXWXUHIRUWKH)DUIHWFK

bXVLQHVV ˆ
 )RUH[DPSOHGXULQJWKH&RPSDQ\¶V&DSLWDO0DUNHWV'D\RQ'HFHPEHU

1HYHVUHSUHVHQWHGWKDW)DUIHWFKZDVJRLQJ³WRFRQWLQXHRQDSDWKRIJURZWK

SUR¿WDEOHJURZWKDQGFDVKÀRZJHQHUDWLRQ´ˆ
. 2QWKHVDPHGD\, -RUGDQVWDWed:

³>:@HKDYHFOHDUYLVLELOLW\WKDWZHZLOOGHOLYHUQRWRQO\JURZWKEXWVXVWDLQHGSUR¿WDELOLW\

DQGSRVLWLYHIUHHFDVKÀRZPRYLQJIRUZDUG´ˆ$WWKHEHJLQQLQJRI&DSLWDO

0DUNHWV'D\WKHLQWURGXFWRU\VSHDNHUVWDWHG

           :HZLOODOVREHPDNLQJIRUZDUG-ORRNLQJVWDWHPHQWVWRGD\$FWXDO
           UHVXOWV FRXOG GL൵HU PDWHULDOO\ IURP WKRVH IRUZDUG[-ORRNLQJ@
           VWDWHPHQWV DQG ZH XQGHUWDNH QR REOLJDWLRQ WR SXEOLFO\ XSGDWH RU
           UHYLVHWKHP)RUDGLVFXVVLRQRIVRPHRIWKHIDFWRUVWKDWFRXOGFDXVH
           DFWXDOUHVXOWVWRGL൵HUIURPWKHVHIRUZDUG-ORRNLQJVWDWHPHQWVSOHDVH
           UHIHU WR RXU 6(& ¿OLQJV  :H ZLOO DOVR UHIHU WR FHUWDLQ QRQ-IFRS
           ¿QDQFLDOPHDVXUHV<RXFDQ¿QGUHFRQFLOLDWLRQVRIWKHVHPHDVXUHV
           WRWKHPRVWGLUHFWO\FRPSDUDEOH,)56¿QDQFLDOPHDVXUHVLQWKHVOLGH
           SUHVHQWDWLRQVZKLFKZLOOEHDYDLODEOHDWIDUIHWFKLQYHVWRUVFRP
Doc. 81-8 at 5. Plainti൵V DOOHJHWKDWWKH,QGLYLGXDO'HIHQGDQWV¶UHSUHVHQWDWLRQVGXULQJ

&DSLWDO0DUNHWV'D\ FUHDWHGWKHIDOVHLPSUHVVLRQWKDW)DUIHWFKZDVFRPPLWWHGWR

DFKLHYLQJSUR¿WDELOLW\DQGIUHHFDVKÀRZWKURXJKRUJDQLFJURZWKRIH[LVWLQJLQYHVWPHQWV,

DQGWKDWLWFRXOG DFKLHYHWKLVJURZWKWKURXJKLWVEDODQFHVKHHWDQGFUHGLWOLQHVˆ

3ODLQWL൵VIXUWKHUDOOHJHWKDWWKURXJKRXW'HIHQGDQWVIDOVHO\DVVXUHGLQYHVWRUVRIWKH

&RPSDQ\¶VQHDU-WHUPDQGORQJ-WHUPOLTXLGLW\VWUHQJWKUHLQIRUFHGE\)DUIHWFK¶V

commitmHQWWRFRVWFRQWURODQGUHWXUQLQJWRSUR¿WDELOLW\DQGIUHHFDVKÀRZLQFOXGLQJRQ

)HEUXDU\GXULQJDQLQYHVWRUFDOOGLVFXVVLQJ4. ˆ $WWKHEHJLQQLQJ

RIWKLVFDOODUHSUHVHQWDWLYHRI)DUIHWFKVWDWHG³[b]HIRUHZHEHJLQZHZRXOGOLNHWR

UHPLQG\RXWKDWRXUGLVFXVVLRQVWRGD\ZLOOLQFOXGHIRUZDUG-ORRNLQJVWDWHPHQWV $FWXDO

UHVXOWVFRXOGGL൵HUPDWHULDOO\IURPWKRVHLQGLFDWHGLQWKHIRUZDUG-ORRNLQJVWDWHPHQWVDQG

IRUZDUG-ORRNLQJVWDWHPHQWVPDGHWRGD\VSHDNRQO\WRRXUH[SHFWDWLRQVDVRIWRGD\´


                                               5


    Case 1:23-cv-10982-ER          Document 86         Filed 09/29/26      Page 6 of 39


Doc. 81-10 at 5. PKDLUWROGLQYHVWRUVWKDWWKH&RPSDQ\ZDVLQD³VWURQJSRVLWLRQ´WR

GHOLYHURQLWVJRDOVIRUDQG1HYHVVWDWHG WKDW)DUIHWFKZDV³an even VWURQJHUDQG

PRUHH൶FLHQW RUJDQL]DWLRQ,´DQGWKDWKHZDV³PRUHFRQ¿GHQWWKDQHYHU´DERXWWKH

&RPSDQ\¶V³SURVSHFWVWRGHOLYHUJURZWKSUR¿WDELOLW\DQGSRVLWLYHIUHHFDVKÀRZLQ

DQGEH\RQG´ ˆˆ 104–05, 158. 3KDLU DOVR VWDWHG
³๠HZRUNZH¶YHGRQHWKURXJKRXW

DQGWKH\HDUVSULRULQYHVWLQJLQRXUFXVWRPHUDQGLQRXUSDUWQHUVKLSVZLWKEUDQGV

DQGERXWLTXHVSXWVXVLQDVWURQJSRVLWLRQWRGHOLYHURQRXUJRDOV´ˆ1HYHV

DOVRVWDWHGWKDW)DUIHWFKKDG³DOOWKHNH\HOHPHQWVWRH[HFXWHRQ>LWV@ SODQ.´ ˆ 157.

       On 0DUFK )DUIHWFK¿OHGLWV)RUP-)IRU)<. Doc. 81-๠H

GRFXPHQWDGYLVHG, ³>W@KLV$QQXDO5HSRUWFRQWDLQVVWDWHPHQWVWKDWFRQVWLWXWHµIRUZDUG-

ORRNLQJVWDWHPHQWV¶ZLWKLQWKHPHDQLQJRIWKH>36/5$@ :HLQWHQGVXFKIRUZDUG-

ORRNLQJVWDWHPHQWVWREHFRYHUHGE\WKH VDIHKDUERUSURYLVLRQV. ๠HVHVWDWHPHQWVDUH

QHLWKHUSURPLVHVQRUJXDUDQWHHVEXWLQYROYHNQRZQDQGXQNQRZQULVNVWKDWPD\

FDXVHRXUDFWXDOUHVXOWVSHUIRUPDQFHRUDFKLHYHPHQWVWREHPDWHULDOO\ GL൵HUHQW. . . .´ Id.

at 11. ๠H)RUP 20-F DOVRVWDWHG: ³:HEHOLHYHWKDWRXUVRXUFHVRIOLTXLGLW\DQGFDSLWDO

ZLOOEHVX൶FLHQWWRPHHWRXUEXVLQHVVQHHGVIRUDWOHDVWWKHQH[WWZHOYHPRQWKV :HDOVR

H[SHFWWKHVHVRXUFHVRIOLTXLGLW\ZLOOEHVX൶FLHQWWRIXQGRXUORQJ-WHUPFRQWUDFWXDO

REOLJDWLRQVDQGFDSLWDOQHHGV´ˆ

       +RZHYHULQ$SULO3ODLQWL൵VFRQWHQGWKDW VHQLRU PDQDJHPHQWZDVFRQFHUQHG

WKDW)DUIHWFKFRXOGEHIRUFHGWRGHOLVWIURPWKH1<6(RUHYHQFHDVHWRH[LVWE\WKHHQGRI

WKH\HDUˆ8. $IRUPHUHPSOR\HH ³FE5´ , ZKRPHWZLWK-RUGDQ LQ$SULO,

UHFDOOHGWKDW-RUGDQVtated WKDWPDMRULQYHVWRUVPD\ SXOOWKHLUIXQGLQJEHFDXVHRI

ORQJVWDQGLQJLQWHUQDOGH¿FLHQFLHV. Id. 2Q0D\LQWKH4(DUQLQJV

5HOHDVH-RUGDQVWDWHGWKDWWKH&RPSDQ\³GHOLYHUHGZKDW>LW@VHWRXWWRDFKLHYH. [It

KDV@VXFFHVVIXOO\QDYLJDWHGWKURXJKXQSUHFHGHQWHGPDFURFKDOOHQJHVDQGWKURXJK

FRQWLQXHGIRFXVHGH[HFXWLRQ>LW@UHPDLQ>V@RQWUDFNWRGHOLYHUD\HDURIOX[XU\PDUNHW-

EHDWLQJJURZWKDUHWXUQWRSUR¿WDELOLW\DQGSRVLWLYHIUHHFDVKÀRZ´ˆ๠LV5HOHDVH

                                              6


    Case 1:23-cv-10982-ER          Document 86        Filed 09/29/26      Page 7 of 39


ZDVDFFRPSDQLHGE\DZDUQLQJWKDWLW³FRQWDLQVIRUZDUG-ORRNLQJVWDWHPHQWVZLWKLQWKH

PHDQLQJRIWKH>36/5$@. . . . ๠HVHVWDWHPHQWVDUHQHLWKHUSURPLVHVQRUJXDUDQWHHVEXW

LQYROYHNQRZQDQGXQNQRZQULVNVXQFHUWDLQtiHVDQGRWKHULPSRUWDQWIDFWRUVWKDWPD\

FDXVHDFWXDOUHVXOWVSHUIRUPDQFHRUDFKLHYHPHQWVWREHPDWHULDOO\GL൵HUHQW .´ Doc.

81-16 at 18. On 6HSWHPEHU)DUIHWFKUS +ROGLQJV,QFDVXEVLGLDU\RI))

+ROGLQJV ERUURZHGDQDGGLWLRQDOPLOOLRQGROODUVIURP-30RUJDQDVDWHUPORDQ

ˆ 109. 3ODLQWL൵VDOOHJHWKDWWKH VWDWHPHQWVWKH,QGLYLGXDO'HIHQGDQWVPDGHDERXWWKH

¿QDQFLDOZHOO-EHLQJRI)DUIHWFKGXULQJWKLVSHULRGZHUHPDWHULDOO\IDOVHDQGPLVOHDGLQJ

EHFDXVHDV'HIHQGDQWVNQHZ WKH&RPSDQ\ZDVIDFLQJVHYHUH¿QDQFLDOKDUGVKLSDQG

'HIHQGDQWVZHUH³DFWLYHO\SDUWLFLSDWLQJLQH൵RUWVWRVHFXUHDOWHUQDWLYH¿QDQFLQJGXH

WRLWVSRRU¿QDQFLDOFRQGLWLRQDQGJURZLQJOLTXLGLW\SUHVVXUHV.´ ˆˆ 154, 165, 168, 174,

178, 181.

       3ODLQWL൵VFRQWHQGWKDW )DUIHWFK¶V VWRFNSULFH³FDPHWXPEOLQJGRZQ´DIWHUDVHULHV

RIUHYHODWLRQVLQGLFDWLQJWKDW )DUIHWFK ZDVQRWH[HFXWLQJRQLWVSODQWRDFKLHYH

SUR¿WDELOLW\DQGSRVLWLYHIUHHFDVKÀRZWKDWLWVSUHYLRXVJXLGDQFHDERXW SHUIRUPDQFHZDV

QRWWREHWUXVWHGDQGXOWLPDWHO\WKDWWKHEXVLQHVVKDGEHHQJXWWHGDQGVROGR൵IRULWVSDUWV

WRDYRLGLQVROYHQF\ ˆ $IWHUWKHUHOHDVHRISRRU4UHVXOWVDQGVLJQL¿FDQWO\

UHGXFHGFY JXLGDQFHWKHVWRFNSULFHIHOO.17WRRQ$XJXVW, ˆˆ

111, 114. 2Q1RYHPEHU)DUIHWFKDQQRXQFHGWKDWLWZRXOGQRWGLVFORVH4

UHVXOWVDQGWKDWLWVSUHYLRXVJXLGDQFHDQGIRUHFDVWVFRXOGQRWEHUHOLHGXSRQˆ

๠HIROORZLQJGD\WKHVWRFNSULFHGURSSHGWR
ˆ2Q'HFHPEHU

)DUIHWFKR൶FLDOO\DJUHHGWRWUDQVIHUDOORIWKHEXVLQHVVDQGDVVHWVRI))+ROGLQJV

WKHSULPDU\VXEVLGLDU\RI)DUIHWFKWR&RXSDQJ,QFIRUDPLOOLRQEULGJHORDQ.

ˆ $FFRUGLQJWR3ODLQWL൵VWKLVH൵HFWLYHO\JXWWHGWKHSXEOLFO\WUDGHGFRPSDQ\RILWV

DVVHWVOHDYLQJLWXQDEOHWRPHHWLWVGHEWREOLJDWLRQVDQGVWULSSLQJLQYHVWRUVRIDQ\YDOXH

WKHVKDUHVKHOGId. ๠LVFXOPLQDWHGLQWKHVWRFNSULFHIDOOLQJ
WRDVKDUH.

ˆ 122. ๠e NYSE commenced GHOLVWLQJ SURFHHGLQJVRQ'HFHPEHUId. On

                                              7


    Case 1:23-cv-10982-ER               Document 86           Filed 09/29/26         Page 8 of 39


-DQXDU\6XUSLTXH$FTXLVLWLRQ/LPLWHG ³6XUSLTXH´ SXUFKDVHGWKH)DUIHWFK

bXVLQHVV. ˆ 127. 3ODLQWL൵VDOOHJHWKDWWKLVH൵HFWLYHO\DOORZHG)DUIHWFKWRZULWHR൵RYHU

ELOOLRQRIGHEWREOLJDWLRQVˆ 6KRUWO\DIWHURQ)HEUXDU\:LOPLQJWRQ

7UXVWDFUHGLWRURI )DUIHWFK /LPLWHG¿OHGDSHWLWLRQIRUWKHZLQGLQJ-XSRIWKHFRPSDQ\in

WKH*UDQG&RXUWRIWKH&D\PDQ,VODQGV See Doc. 61-1.

        ๠URXJKRXWWKLVSHULRGHDFKRIWKH,QGLYLGXDO'HIHQGDQWVKHOGDVLJQL¿FDQW

DPRXQWRIVWRFNLQ)DUIHWFK 2Q0DUFK1HYHVRZQHG

VKDUHV-RUGDQ

RZQHG
VKDUHVDQG3KDLURZQHGVKDUHV'RF-3 at 117. On

'HFHPEHU 1HYHVRZQHG
VKDUHV. Doc. 81-22 at 6. 2Q$XJXVW

-RUGDQRZQHGVKDUHV 'RFV-12 at 121, 81-20 at 3. 2Q$XJXVW

3KDLURZQHGVKDUHVDocV. 81-12 at 121, 81-19 at 3. +RZHYHU-RUGDQ

DQG3KDLUVROGVKDUHVLQ$XJXVWVHOOLQJ DSSUR[LPDWHO\00,000 DQG ZRUWK

RIVWRFNUHVSHFWLYHO\, 'RFV-20 at 3, 81-19 at 3, DQG1HYHVmoved VRPHRIKLVVKDUHV

WRDKROGLQJFRPSDQ\ EHWZHHQWKHEHJLQQLQJRIDQGHQGRI, DocV. 81-3 at 117,

81-12 at 121, 81-22 at 6.
            B. Procedural Background
        -DVPLQH:XLQGLYLGXDOO\DQGRQEHKDOIRIDOORWKHUVVLPLODUO\VLWXDWHG¿OHGWKH

¿UVWFRPSODLQWLQWKLVFRQVROLGDWHGFODVVDFWLRQRQ'HFHPEHU
 WKH³:X6'1<
$FWLRQ´  Doc. 1. ๠UHHPHPEHUVRIWKHSXWDWLYHFODVV¿OHGPRWLRQVVHHNLQJ

DSSRLQWPHQWDVOHDGSODLQWL൵ 3 2Q2FWREHUWZRPRQWKVSULRUWRWKH¿OLQJRIWKH
                                  2F


above-FDSWLRQHGDFWLRQDUHODWHGVHFXULWLHVFODVVDFWLRQDVVHUWLQJVXEVWDQWLDOO\WKHVDPH


3
  ๠HIROORZLQJLQGLYLGXDOVPRYHGWREHDSSRLQWHGDVOHDGSODLQWL൵LQWKLVDFWLRQ. 2Q'HFHPEHU

PRYDQW0LFKDHO%LHYHWVNLPRYHGWREHDSSRLQWHGDVOHDGSODLQWL൵DQG๠H5RVHQ/DZ)LUP3$DVOHDG
FRXQVHO Doc. 5. $OVRRQ'HFHPEHU
PRYDQW(GXDUGR$UFKHU9HORVR0DUWLQVDQG5HQRSRUWR
,QYHVWLPHQWRV,PRELOLiULRV/'$ ³0DUWLQV´ PRYHGWREHDSSRLQWHGDVOHDGSODLQWL൵DQG3RPHUDQW]//3
DVOHDGFRXQVHOIRUWKH&ODVV Doc. 8. /DVWO\RQ-DQXDU\)HUQDQGR6XOLFKLQLQGLYLGXDOO\DQGRQ
EHKDOIRI/\[RU2YHUVHDV+ROGLQJV Limited DQG&LQHUJ\$GYLVRUV Limited ³6XOLFKLQ´ moved to be
DSSRLQWHGDVOHDGSODLQWL൵DQG/HYL .RUVLQVN\//3DVOHDGFRXQVHO Doc. 17. 0DUWLQVDQG6XOLFKLQ
DORQJZLWKWKUHHRWKHULQGLYLGXDOV—<XDQ]KH)X7DPLP$OWDPLPLDQG.DXQGULD:HVW—PRYHGVHSDUDWHO\
WREHDSSRLQWHGDVOHDGSODLQWL൵LQ Ragan v. Farfetch Limited et al., No. 8:23-cv-02857 (D. Md.). Doc. 23
at 2.

                                                    8


       Case 1:23-cv-10982-ER             Document 86         Filed 09/29/26        Page 9 of 39


FODLPVZDV¿OHGLQWKH8QLWHG6WDWHV'LVWULFW&RXUWIRUWKH'LVWULFWRI0DU\ODQGRagan v.

Farfetch Limited et al., No. 8:23-cv-02857 (D. Md.). Doc. 23 at 2. 2Q-DQXDU\

WKHcRXUWLQRagan HQWHUHGDVWLSXODWLRQDQGRUGHUWUDQVIHUULQJWKHFDVHWRWKH6RXWKHUQ

'LVWULFWRI1HZ<RUNZKLFKZDVDVVLJQHGWKHFDVHQXPEHU 24-cv- WKH³5DJDQ

6'1<$FWLRQ´DQGWRJHWKHUZLWKWKH:X6'1<$FWLRQWKH³5HODWHG$FWLRQV´  Id. at 3.

2Q)HEUXDU\WKH5DJDQ6'1<$FWLRQZDVWUDQVIHUUHGIURP-XGJH3DXO

(QJHOPD\HUWRWKHXQGHUVLJQHG ๠HVDPHGD\XSRQVWLSXODWLRQDQGDJUHHPHQWE\WKH

SDUWLHVKHUHWRWKH&RXUWFRQVROLGDWHGWKH5HODWHG$FWLRQVXQGHUcDVHQXPEHU 23-cv-


)HUQDQGR6XOLFKLQDQG<XDQ]KH)XZHUHDSSRLQWHGOHDGSODLQWL൵VDQG/HYL 

.RUVLQVN\//3DQG+DJHQV%HUPDQ6RERO6KDSLUR//3ZHUHDSSRLQWHGFR-OHDGFRXQVHO

Id. at 4–5. ,QWKDW2UGHUWKH&RXUWGLUHFWHG3ODLQWL൵VWR¿OHDQDPHQGHGFRPSODLQWLQWKH

FRQVROLGDWHGFDVHRUGHVLJQDWHWKHH[LVWLQJFRPSODLQWDVWKHRSHUDWLYHFRPSODLQW Id. at 5.

๠H&RXUWDOVRGLUHFWHG'HIHQGDQWVDQGOHDGSODLQWL൵VWRPHHWDQGFRQIHUUHJDUGLQJ

VFKHGXOLQJ Id.

           2Q-XQHOHDGSODLQWL൵V¿OHGWKH&RQVROLGDWHG$PHQGHG&RPSODLQW

    ³&$&´ DOOHJLQJWZRFRXQWV
 (1) YLRODWLRQRISection  E RIWKH([FKDQJH$FW 

86&†M E DQG5XOHE-5 (17 C.F.R § 240.10b-5); and (2) DYLRODWLRQRISection

 D RIWKH6HFXULWLHV([FKDQJH$FWE\WKH,QGLYLGXDO'HIHQGDQWV Doc. 34. ๠H&$&

DOOHJHGDcODVVSHULRGEHWZHHQ)HEUXDU\WKURXJK'HFHPEHU

LQFOXVLYH 4 Id. ˆ
             3F


           2Q6HSWHPEHUWKH,QGLYLGXDO'HIHQGDQWV¿OHGDPRWLRQWRGLVPLVVWKH

&$&LQLWVHQWLUHW\ZLWKSUHMXGLFH 'RFV ๠H,QGLYLGXDO'HIHQGDQWVDUJXHGWKDW

WKH&$&SOHDGHGQRYLDEOHWKHRU\RIVHFXULWLHVIUDXGDQGVKRXOGWKHUHIRUHEHGLVPLVVHG

Doc. 44 at 10. 6SHFL¿FDOO\WKH,QGLYLGXDO'HIHQGDQWVDUJXHGWKDW3ODLQWL൵VGLGQRWSOHDG

DQ\DFWLRQDEOHPLVVWDWHPHQWRURPLVVLRQDQGLQVWHDGWKH&$&³VHQ>W@UHDGHUVRQD


4
    ๠H6$&DPHQGHGWKH&ODVV3HULRGWREH'HFHPEHUWKURXJK'HFHPEHULQFOXVLYH ˆ

                                                    9


   Case 1:23-cv-10982-ER          Document 86        Filed 09/29/26       Page 10 of 39


VFDYHQJHUKXQWWKURXJKODUJHEORFNTXRWDWLRQVH[FHUSWHGIURPPRUHWKDQGL൵HUHQW

GLVFORVXUHVRYHUDQHDUO\WZR-\HDUSHULRG´LQZKDWFRQVWLWXWHGSX]]OH-SOHDGLQJ Id. at 11.

๠H,QGLYLGXDO'HIHQGDQWVDGGHGWKDWQHDUO\DOOWKHFKDOOHQJHGVWDWHPHQWVDUH 1) non-

DFWLRQDEOHH[SUHVVLRQVRIFRUSRUDWHRSWLPLVP 2) IRUZDUG-ORRNLQJVWDWHPHQWVSURWHFWHG

E\WKH36/5$VDIHKDUERUDQGRU 3) RSLQLRQVWDWHPHQWV Id. /DVWO\WKH,QGLYLGXDO

'HIHQGDQWVDUJXHGWKDWWKH3ODLQWL൵VGLGQRW—DQGFRXOGQRW—SOHDGIDFWVWRPHHWWKH

UHTXLVLWH³VWURQJ´LQIHUHQFHWKDW'HIHQGDQWVDFWHGZLWKVFLHQWHU Id. at 12.

        :KLOHWKH,QGLYLGXDO'HIHQGDQWV¶¿UVWPRWLRQWRGLVPLVVUHPDLQHGSHQGLQJRQ

0D\3ODLQWL൵V¿OHGDPRWLRQVHHNLQJWRPRGLI\WKHDXWRPDWLFGLVFRYHU\VWD\

LPSRVHGE\ WKH36/5$'RF
3ODLQWL൵VUHTXHVWHGSURGXFWLRQRIDOO³QRQ-SULYLOHJHG

GRFXPHQWVDOUHDG\SURGXFHG RUEHLQJSURGXFHGE\ 6XUSLTXHL.P. WR)DUIHWFK¶V

OLTXLGDWRU´LQUHVSRQVHWRD%DQNUXSWF\5XOHVXESRHQDLQWKH&D\PDQSURFHHGLQJ

'RFDW3ODLQWL൵VFRQWHQGHGWKDWOLIWLQJWKHVWD\³LPSRVH>G@QRXQGXHEXUGHQ´RQ

6XUSLTXHDQGZDV³QHFHVVDU\WRSUHYHQWUHDODQGLUUHSDUDEOHKDUP´ Id. at 7.

        2Q0D\QRQ-SDUW\6XUSLTXH¿OHGDEULHILQRSSRVLWLRQWR3ODLQWL൵V¶

PRWLRQWROLIWWKHDXWRPDWLFGLVFRYHU\VWD\'RF6XUSLTXHDUJXHGWKDW3ODLQWL൵VKDYH

QRWVDWLV¿HGWKHLUKHDY\EXUGHQWRMXVWLI\OLIWLQJWKHVWD\ZKLFK&RQJUHVVKDVPDQGDWHG

WKURXJKWKH36/5$. Id. at 5. 6SHFL¿FDOO\6XUSLTXHDUJXHGWKDW3ODLQWL൵VZHUHZURQJRQ

WKHIDFWVIDLOHGWRH[SODLQZK\OLIWLQJWKHVWD\ZDVQHFHVVDU\WRDYRLGFDXVLQJWKHP

XQGXHSUHMXGLFHDQG IDLOHGWRPHHWWKH36/5$¶VSDUWLFXODULW\UHTXLUHPHQWVId. ๠H

,QGLYLGXDO'HIHQGDQWVDOVR¿OHGDEULHILQRSSRVLWLRQWR3ODLQWL൵V¶PRWLRQWROLIWWKH

DXWRPDWLFGLVFRYHU\VWD\RQ0D\RQWKHVDPHJURXQGVDV6XUSLTXH'RF

2Q)HEUXDU\WKH&RXUWGHQLHG3ODLQWL൵V¶PRWLRQWROLIWWKHDXWRPDWLFGLVFRYHU\

VWD\'RF

        2Q6HSWHPEHU30WKH&RXUWJUDQWHGWKH,QGLYLGXDO'HIHQGDQWV¶PRWLRQWR

GLVPLVVWKH&$& Doc. 73. ๠H&RXUWKHOGWKDWWKH&$&³IDLO>HG@WRPHHWWKHSOHDGLQJ

VWDQGDUGVRI5XOH
 E DQGWKH36/5$´ Id. at 27. 6SHFL¿FDOO\WKH&RXUWFRQFOXGHGWKDW

                                             10


      Case 1:23-cv-10982-ER        Document 86        Filed 09/29/26       Page 11 of 39


3ODLQWL൵VKDG³IDLOHGWRDOOHJHDPDWHULDOPLVUHSUHVHQWDWLRQRURPLVVLRQWRVXSSRUWDFODLP

XQGHUSection  E ´ Id. at 32. ๠H&RXUWIXUWKHUIRXQGWKDW3ODLQWL൵V³KDYHQRW

VX൶FLHQWO\DOOHJHGDQLQIHUHQFHRIVFLHQWHUµDWOHDVWDVVWURQJDVWKHRSSRVLQJLQIHUHQFH¶´

DQGWKHUHIRUHGLVPLVVHG3ODLQWL൵V¶Section  E DQG5XOHE-FODLPVDJDLQVWWKH

,QGLYLGXDO'HIHQGDQWV Id. at 42–43. %HFDXVH3ODLQWL൵VIDLOHGWRSOHDGDSULPDU\

YLRODWLRQRIWKH6HFXULWLHV([FKDQJH$FWWKH&RXUWDOVRGLVPLVVHG3ODLQWL൵V¶FODLPV

SXUVXDQWWRSection 20(a). Id. at 45. ๠H&RXUWJUDQWHG3ODLQWL൵VOHDYHWR¿OHDVecond

amended cRPSODLQW Id. at 46.

         2Q1RYHPEHU3ODLQWL൵V¿OHGWKH SAC, DOOHJLQJWZRFRXQWV
  

YLRODWLRQRISection  E RIWKH6HFXULWLHV([FKDQJH$FW 86&†M E DQG5XOH

10b-5 (17 C.F.R. § 240.10b-5); and (2) YLRODWLRQRISection  D RIWKH6HFXULWLHV

([FKDQJH$FWE\WKH,QGLYLGXDO'HIHQGDQWV'RF๠H6$&DOOHJHVD&ODVV3HULRG

EHWZHHQ'HFHPEHUWKURXJK'HFHPEHULQFOXVLYHˆ

         2Q'HFHPEHUWKH,QGLYLGXDO'HIHQGDQWV¿OHGDPRWLRQWRGLVPLVVWKH

6$&LQLWVHQWLUHW\'RF
๠H,QGLYLGXDO'HIHQGDQWVFRQWHQGWKDWWKH6$&VKRXOGEH

GLVPLVVHG³IRUWKHVDPHUHDVRQVWKLV&RXUWGLVPLVVHGWKHSULRUFRPSODLQW´'RFDW

II.      LEGAL STANDARDS
           A. Rule 12(b)(6)
         :KHQUXOLQJRQDPRWLRQWRGLVPLVVSXUVXDQWWR5XOH E  WKH&RXUWPXVW

DFFHSWDOOIDFWXDODOOHJDWLRQVLQWKHFRPSODLQWDVWUXHDQGGUDZDOOUHDVRQDEOHLQIHUHQFHV

LQWKHSODLQWL൵¶VIDYRU See Koch v. Christie’s International PLC, 699 F.3d 141, 145 (2d

&LU . +RZHYHUWKH&RXUWLVQRWUHTXLUHGWRFUHGLW³PHUHFRQFOXVRU\VWDWHPHQWV´RU

³>W@KUHDGEDUHUHFLWDOVRIWKHHOHPHQWVRIDFDXVHRIDFWLRQ´ Ashcroft v. Iqbal, 556 U.S.

662 
  FLWLQJBell Atlantic Corporation v. Twombly, 550 U.S. 544, 555 (2007)).

³7RVXUYLYHDPRWLRQWRGLVPLVVDFRPSODLQWPXVWFRQWDLQVX൶FLHQWIDFWXDOPDWWHU . . to

µVWDWHDFODLPWRUHOLHIWKDWLVSODXVLEOHRQLWVIDFH¶´ Id. DW TXRWLQJTwombly, 550

U.S. at 570). $FODLPLVIDFLDOO\SODXVLEOH³ZKHQWKHSODLQWL൵SOHDGVIDFWXDOFRQWHQWWKDW

                                              11


   Case 1:23-cv-10982-ER           Document 86         Filed 09/29/26       Page 12 of 39


DOORZVWKHFRXUWWRGUDZWKHUHDVRQDEOHLQIHUHQFHWKDWWKHGHIHQGDQWLVOLDEOHIRUWKH

PLVFRQGXFWDOOHJHG´ Id. FLWLQJTwombly, 550 U.S. at 556). 0RUHVSHFL¿FDOO\WKH

SODLQWL൵PXVWDOOHJHVX൶FLHQWIDFWVWRVKRZ³PRUHWKDQDVKHHUSRVVLELOLW\WKDWD

GHIHQGDQWKDVDFWHGXQODZIXOO\´ Id. ,IWKHSODLQWL൵KDVQRW³QXGJHG>KLV@FODLPVDFURVV

WKHOLQHIURPFRQFHLYDEOHWRSODXVLEOH>WKH@FRPSODLQWPXVWEHGLVPLVVHG´ Twombly,

550 U.S. at 570.

        ๠HTXHVWLRQLQD5XOH E  PRWLRQWRGLVPLVV³LVQRWZKHWKHUDSODLQWL൵ZLOO

XOWLPDWHO\SUHYDLOEXWZKHWKHUWKHFODLPDQWLVHQWLWOHGWRR൵HUHYLGHQFHWRVXSSRUWWKH

FODLPV´ Sikhs for Justice v. Nath
)6XSSG
 6'1<  TXRWLQJ

Villager Pond, Inc. v. Town of Darien)G G&LU

  ³>7@KHSXUSRVH

RI)HGHUDO5XOHRI&LYLO3URFHGXUH E  µLVWRWHVWLQDVWUHDPOLQHGIDVKLRQWKH

IRUPDOVX൶FLHQF\RIWKHSODLQWL൵¶VVWDWHPHQW RIDFODLPIRUUHOLHIZLWKRXWUHVROYLQJD

FRQWHVWUHJDUGLQJLWVVXEVWDQWLYHPHULWV¶´DQGZLWKRXWUHJDUGIRUWKHZHLJKWRIWKH

HYLGHQFHWKDWPLJKWEHR൵HUHGLQVXSSRUWRIWKHSODLQWL൵¶VFODLPV Halebian v. Berv, 644

)G G&LU  TXRWLQJGlobal Network Communications, Inc. v. City of

New York)G G&LU  )XUWKHUPRUH³RQO\DFRPSODLQWWKDWVWDWHV

DSODXVLEOHFODLPIRUUHOLHIVXUYLYHVDPRWLRQWRGLVPLVV´DQG³>G@HWHUPLQLQJZKHWKHUD

FRPSODLQWVWDWHVDSODXVLEOHFODLPIRUUHOLHIZLOO . EHDFRQWH[W-VSHFL¿FWDVNWKDW

UHTXLUHVWKHUHYLHZLQJFRXUWWRGUDZRQLWVMXGLFLDOH[SHULHQFHDQGFRPPRQVHQVH´

Iqbal, 556 U.S. at 679.
           B. Rule 9(b)
        %HFDXVHFODLPVXQGHUSection  E RIWKH([FKDQJH$FWDQG5XOHE-5

WKHUHXQGHUVRXQGLQIUDXGWKH\DUHVXEMHFWWRWKHKHLJKWHQHGSOHDGLQJUHTXLUHPHQWVRI

FedHUDO RXOHRI Civil PURFHGXUH
 E DQGWKH3SLRA. Novak v. Kasaks, 216 F.3d 300,

306– G&LU  5XOH
 E UHTXLUHVWKDWWKHFRPSODLQW³VWDWHZLWKSDUWLFXODULW\WKH

FLUFXPVWDQFHVFRQVWLWXWLQJIUDXG´ Fed. R. Civ. P. 9(b). 7RVDWLVI\WKDWUHTXLUHPHQWWKH

FRPSODLQWPXVW
 ³  VSHFLI\WKHVWDWHPHQWVWKDWWKHSODLQWL൵FRQWHQGVZHUHIUDXGXOHQW

                                              12


   Case 1:23-cv-10982-ER           Document 86        Filed 09/29/26       Page 13 of 39


(2) LGHQWLI\WKHVSHDNHU   VWDWHZKHUHDQGZKHQWKHVWDWHPHQWVZHUHPDGHDQG  

H[SODLQZK\WKHVWDWHPHQWVZHUHIUDXGXOHQW´ ATSI Communications, Inc. v. Shaar Fund,

Limited
)G

 G&LU  FLWLQJNovak, 216 F.3d at 306). ๠H36/5$

LPSRVHVVLPLODUUHTXLUHPHQWVRQFODLPVEURXJKWXQGHUWKH([FKDQJH$FW
 ³WKHFRPSODLQW

VKDOOVSHFLI\HDFKVWDWHPHQWDOOHJHGWRKDYHEHHQPLVOHDGLQJWKHUHDVRQRUUHDVRQVZK\

WKHVWDWHPHQWLVPLVOHDGLQJDQGLIDQDOOHJDWLRQUHJDUGLQJWKHVWDWHPHQWRURPLVVLRQLV

PDGHRQLQIRUPDWLRQDQGEHOLHIWKHFRPSODLQWVKDOOVWDWHZLWKSDUWLFXODULW\DOOIDFWVRQ

ZKLFKWKDWEHOLHILVIRUPHG´ 86&†X-4(b)(1). ๠H36/5$IXUWKHUUHTXLUHVWKDW

WKHFRPSODLQW³VWDWHZLWKSDUWLFXODULW\IDFWV JLYLQJULVHWRDVWURQJLQIHUHQFHWKDWWKH

GHIHQGDQWDFWHGZLWKWKHUHTXLUHGVWDWHRIPLQG´ZLWKUHVSHFWWRHDFKDOOHJHG

PLVVWDWHPHQWRURPLVVLRQ Id. †X-4(b)(2)(A). $FRPSODLQWZLOOVXUYLYHXQGHUWKDW

KHLJKWHQHGVWDQGDUG³RQO\LIDUHDVRQDEOHSHUVRQZRXOGGHHPWKHLQIHUHQFHRIVFLHQWHU

FRJHQWDQGDWOHDVWDVFRPSHOOLQJDVDQ\RSSRVLQJLQIHUHQFHRQHFRXOGGUDZIURPWKH

IDFWVDOOHJHG´ Tellabs, Inc. v. Makor Issues & Rights, Limited, 551 U.S. 308, 324 (2007).
          C. External Documents
       ,QUHVROYLQJDPRWLRQWRGLVPLVVXQGHU5XOH E  FRXUWVJHQHUDOO\PD\QRW

FRQVLGHUPDWHULDOVH[WULQVLFWRWKHFRPSODLQW Fed. R. Civ. P. 12(d). +RZHYHUWKDWUXOHLV

QRWDEVROXWH ,QDGGLWLRQWRWKHIDFWVDOOHJHGLQWKHFRPSODLQWFRXUWV³PD\FRQVLGHUDQ\
ZULWWHQLQVWUXPHQWDWWDFKHGWRWKHFRPSODLQWVWDWHPHQWVRUGRFXPHQWVLQFRUSRUDWHGLQWR

WKHFRPSODLQWE\UHIHUHQFHOHJDOO\UHTXLUHGSXEOLFGLVFORVXUHGRFXPHQWV¿OHGZLWKWKH

SEC, and dRFXPHQWVSRVVHVVHGE\RUNQRZQWRWKHSODLQWL൵DQGXSRQZKLFKLWUHOLHGLQ

EULQJLQJWKHVXLW´ ATSI Communications, 493 F.3d at 98. &RXUWVPD\DOVRFRQVLGHU

³PDWWHUVRIZKLFKMXGLFLDOQRWLFHPD\EHWDNHQ´ Goel v. Bunge, Limited, 820 F.3d 554,


 G&LU  FLWDWLRQRmitted). ๠H&RXUWPD\DOVR³WDNHMXGLFLDOQRWLFHRISXEOLF

GLVFORVXUHGRFXPHQWVWKDWPXVWEH¿OHGZLWKWKH>6(&@DQGGRFXPHQWVWKDWERWKµEHDURQ

WKHDGHTXDF\¶RI6(&GLVFORVXUHVDQGDUHµSXEOLFGLVFORVXUHGRFXPHQWVUHTXLUHGE\ODZ¶´

Silsby v. Icahn)6XSSG 6'1<) (TXRWLQJ Kramer v. Time

                                              13


   Case 1:23-cv-10982-ER           Document 86        Filed 09/29/26      Page 14 of 39


Warner, Inc., 937 F.2d 767, 773– G&LU

 , Dৼ’d sub nom. Lucas v. Icahn, 616 F.

$SS¶[ G&LU ; see also In re Bank of America AIG Disclosure Securities

Litigation
)6XSSG 6'1< Dৼ’d)$SS¶[
 G&LU

2014). +RZHYHUWKH&RXUWFDQFRQVLGHUDFRPSDQ\¶VSXEOLF¿OLQJVZLWKWKH6(&³µRQO\

WRGHWHUPLQHZKDWWKHGRFXPHQWVVWDWHG¶DQGµQRWWRSURYHWKHWUXWKRIWKHLUFRQWHQWV¶´

Roth v. Jennings
)G


 G&LU (HPSKDVLVRPLWWHG) TXRWLQJKramer,

937 F.2d at 774).
III.   DISCUSSION
           A. Judicial Notice of External Documents
       ๠H,QGLYLGXDO'HIHQGDQWVDWWDFK5 GRFXPHQWVWRWKH'HFODUDWLRQRI-DVRQ&

+HJWLQVXSSRUWRIWKHLUPRWLRQWRGLVPLVV See Doc. 81.

       ๠H6$&QHLWKHU citeV nRUUHIHUV WRVL[RIWKHDWWDFKHGGRFXPHQWV

       ƒ   ([KLELW
- <DKRR)LQDQFH6WRFN3ULFH5HFRUG
       ƒ   ([KLELW
- )RUP 63KDLU
       ƒ   ([KLELW- )RUP (-RUGDQ
       ƒ   ([KLELW- )RUP* -1HYHV
       ƒ   ([KLELW- )RUEHV$UWLFOH
       ƒ   ([KLELW- 9DQJXDUG๠LQN7DQN$UWLFOH

       $GLVWULFWFRXUWLVHQWLWOHGWRFRQVLGHU³WKHIXOOWH[WRIWKRVHGRFXPHQWV´SDUWLDOO\

TXRWHGLQDFRPSODLQWEXWFRQVLGHUHGLQWHJUDOWRUXOLQJRQDPRWLRQWRGLVPLVV San

/HDQGUR(PHUJHQF\0HGLFDO*URXS3UR¿W6KDULQJ3ODQY3KLOLS0RUULV&RPSDQLHV

Inc.)G
 G&LU

  )RUDGRFXPHQWWREHLQWHJUDOWKHFRPSODLQWPXVW

GRPRUHWKDQPHUHO\PHQWLRQLW Goel, 820 F.3d at 559–60. ๠HFRPSODLQWPXVW³UHO>\@

KHDYLO\XSRQLWVWHUPVDQGH൵HFW´ DiFolco, 622 F.3d at 111 TXRWLQJ0DQJLD¿FRY

Blumenthal, 471 F.3d 391, 398 (2d &LU +HUHVHFXULWLHV¿OLQJVSDUWLDOO\TXRWHGLQ

WKHSACDVZHOODVTXDUWHUO\HDUQLQJVFDOOVDQGUHOHDVHV DUHLQWHJUDOWRWKHDOOHJDWLRQV

EDVHGRQVHFXULWLHVIUDXG $FFRUGLQJO\WKHS$&LQFRUSRUDWHVWKHVHGRFXPHQWVE\

UHIHUHQFH DQGWKH&RXUWZLOOFRQVLGHUWKHPLQGHFLGLQJWKHSUHVHQWPRWLRQ

                                             14


   Case 1:23-cv-10982-ER           Document 86        Filed 09/29/26      Page 15 of 39


       5HJDUGLQJWKHGRFXPHQWVQRWFLWHGLQWKHSAC—<DKRR)LQDQFH6WRFN3ULFH

5HFRUG)RUPV 63KDLU DQG(-RUGDQ), )RUP* -1HYHV WKH)RUEHV AUWLFOH

DQGWKH9DQJXDUGAUWLFOH—WKH&RXUWPD\³WDNHMXGLFLDOQRWLFHRISXEOLFGLVFORVXUH

GRFXPHQWVWKDWPXVWEH¿OHGZLWKWKH[SEC]´DVZHOODV³GRFXPHQWVWKDWERWKµEHDURQ

WKHDGHTXDF\¶RI6(&GLVFORVXUHVDQGDUHµSXEOLFGLVFORVXUHGRFXPHQWVUHTXLUHGE\

ODZ¶´ Silsby)6XSSGDW TXRWLQJ Kramer, 937 F.2d at 773–74)DQGRI³SUHVV

FRYHUDJHHVWDEOLVKLQJZKDWLQIRUPDWLRQH[LVWHGLQWKHSXEOLFGRPDLQGXULQJSHULRGV

UHOHYDQWWRWKHSODLQWL൵V¶FODLPV,´ In re Bank of America
)6XSSGDW (citinJ

Staehr v. Hartford Financial Services Group, Inc., 547 F.3d 406, 425– G&LU 

๠HUHIRUHWKLV&RXUWPD\WDNHMXGLFLDOQRWLFHRIDOORIWKHGRFXPHQWVDWWDFKHGWRWKH

,QGLYLGXDO'HIHQGDQWV¶PRWLRQWRGLVPLVV
          B. Section 10(b) and Rule 10b-5 Liability
           3ODLQWLৼV)DLOto Plead Material Misrepresentations or Omissions
       3ODLQWL൵VPDNHFOHDU WKDWWKH ³XQGLVFORVHGSXUVXLW´ RI3URMHFW$WKHQD LVWKH

GULYLQJIRUFHEHKLQGWKHLUWKHRU\ WKDWWKH,QGLYLGXDO'HIHQGDQWV¶ VWDWHPHQWVZHUH

PLVOHDGLQJ. Doc. 83 at 13. 6SHFL¿FDOO\3ODLQWL൵VDUJXHWKDW WKH,QGLYLGXDO'HIHQGDQWV

³SXEOLFO\DVVXUHGLQYHVWRUVWKDW)DUIHWFKZDVVHOI-IXQGLQJDQGGLGQRWQHHGH[WHUQDO

FDSLWDOZKLOHVHFUHWO\SXUVXLQJ>3URMHFW$WKHQD@ZKRVHHQWLUHSXUSRVHZDVWRUDLVH
H[WHUQDOFDSLWDORUVHOOWKHEXVLQHVVGXHWRWKHFRPSDQ\¶VGLUHFRQGLWLRQ´Id. at 15.

3ODLQWL൵VDUJXHWKDWWKHVHWZRVLPXOWDQHRXVHYHQWVVWDWHPHQWVWKDW)DUIHWFKGLGQRW³QHHG

RXWVLGHFDSLWDO´ZKLOH³DFWLYHO\VHHNLQJRXWVLGHFDSLWDO´PDNHWKHVWDWHPHQWV

IUDXGXOHQWO\PLVOHDGLQJId. ๠H,QGLYLGXDO'HIHQGDQWVFRXQWHUWKDWQRZKHUHLQWKH6$&

do DQ\RIWKH,QGLYLGXDO'HIHQGDQWV FODLPWKDW³)DUIHWFKZDVVHOI-IXQGLQJDQGGLGQRW

QHHGH[WHUQDOFDSLWDO´EXWUDWKHU, WKDWWKLVZDV3ODLQWL൵V¶ ³RZQVXEMHFWLYH

µLQWHUSUHWDWLRQ¶´ DQGWKDWWKH&RPSDQ\ZDVFOHDUWKDWLWPD\SXUVXHDGGLWLRQDO¿QDQFLQJ

Doc. 84 at 7. ๠H\IXUWKHUDUJXH WKDW3ODLQWL൵VLPSURSHUO\ DWWHPSWWRGHYHORSIUDXGE\

KLQGVLJKWEHFDXVH³[a]t bottom, WKH6$&DOOHJHVWKDWEHFDXVH)DUIHWFKXOWLPDWHO\ZDV

                                             15


    Case 1:23-cv-10982-ER               Document 86            Filed 09/29/26         Page 16 of 39


SODFHGLQWROLTXLGDWLRQLQHDUO\'HIHQGDQWVPXVWKDYHNQRZQWKDWWKHLU¿QDQFLDO

SURMHFWLRQVJRLQJEDFNWR'HFHPEHUZHUHIDOVH´ Id. at 6.

         $WWKHRXWVHW ³LWLVZHOO-VHWWOHGWKDWµIUDXGE\KLQGVLJKW¶LVQRWDFRJQL]DEOHWKHRU\

RIUHOLHI´ In re PetroChina Co. Limited Securities Litigation)6XSSG, 366

(S.D.N.Y. 2015) TXRWLQJ In re Longtop Financial Technologies Limited Securities

Litigation, 910 )6XSSG561, 579 (S.D.N.Y. 2012)). 3ODLQWL൵V VWDWHWKDWWKH\ do not

UHO\RQIUDXGE\KLQGVLJKW; UDWKHUWKH\DUJXHWKDWWKHSUHVHQWH[LVWHQFHRI3URMHFW$WKHQD

PDGHWKHVWDWHPHQWVIDOVHRUPLVOHDGLQJZKHQWKH ,QGLYLGXDO'HIHQGDQWV made WKHP.

Doc. 83 at 14–15.

         3ODLQWL൵VFRQWHQGWKDWWKLVLQLWLDWLYHZDVLQFRQVLVWHQWZLWKWKH,QGLYLGXDO

'HIHQGDQWV¶VWDWHPHQWVWKDW³)DUIHWFKZDV¿QDQFLDOO\VHFXUHVHOI-IXQGLQJDQGQRWLQ

QHHGRIH[WHUQDOFDSLWDO´EHFDXVH3URMHFW$WKHQD¶V³VROHSXUSRVHZDVWRUDLVHFDSLWDO

WKURXJKH[WUDRUGLQDU\WUDQVDFWLRQV´Id. at 22–23. +RZHYHUWKH\IDLOWRVKRZZK\WKH

H[LVWHQFHRIDSODQWRHQJDJHLQDWDNH-SULYDWHWUDQVDFWLRQPHDQVWKDWWKHDOOHJHG

VWDWHPHQWVZHUHLQIDFWIDOVHRUPLVOHDGLQJ3ODLQWL൵VFLWLQJ Meyer v. Jinkosolar

Holdings Co., 761 F.3d 245, 251–252 G&LU DUJXHWKDWSXUVXLWRI3URMHFW$WKHQD

LVDFWLRQDEOHEHFDXVHLW³FRQWUDGLFWV>)DUIHWFK¶V@SXEOLFQDUUDWLYH´PDNLQJLWDQ

DFWLRQDEOHRPLVVLRQ, Doc. 83 at 23. ๠HSUREOHP ZLWKWKLVDUJXPHQWLVWKDWWKH6$&GRHV

QRWVX൶FLHQWO\DOOHJHWKDWWKH,QGLYLGXDO'HIHQGDQWVVDLGWKDW)DUIHWFKZDVVHOI-IXQGLQJ

DQGQRWLQQHHGRIRXWVLGHFDSLWDO. 5 ๠HVWDWHPHQWV3ODLQWL൵VFLWHGRQRWPDNHWKRVH
                                         4F


DVVXUDQFHVDQGDUHHLWKHUQRQ-DFWLRQDEOHIRUZDUG-ORRNLQJVWDWHPHQWVQRQ-actionable

RSLQLRQVWDWHPHQWVRUQRQ-DFWLRQDEOHSX൵HU\ ˆˆ–86. ³,PSRUWDQWO\WKHQHZ


5
  ,QIDFWLQ)DUIHWFK¶V)RUP-)WKH\H[SOLFLWO\VWDWHG
³,IZHDUHXQDEOHWRJHQHUDWHVX൶FLHQWFDVK
ÀRZVIURPRSHUDWLRQVLQWKHIXWXUHZHPD\KDYHWRREWDLQDGGLWLRQDO¿QDQFLQJ´'RF-12 at 103. ,QWKH
4(DUQLQJV5HOHDVHWKH\VWDWHG
³>$@Q\SURMHFWLRQVRIIXWXUHFDVKQHHGVDQGFDVKÀRZVDUHVXEMHFW
WRLQKHUHQWXQFHUWDLQW\ ,QWKHRUGLQDU\FRXUVHZHFRQWLQXDOO\HYDOXDWHRSSRUWXQLtiHVWRUDLVHDGGLtional
HTXLW\RUGHEWREWDLQFUHGLWIDFLOLtiHVHQWHULQWROHDVLQJDUUDQJHPHQWVHQWHULQWR¿QDQFLQJREOLJDtiRQV
UHSXUFKDVHFRPPRQVWRFNRUUHSXUFKDVHUH¿QDQFHRURWKHUZLVHUHVWUXFWXUHGHEWIRUVWUDWHJLFUHDVRQVRUWR
IXUWKHUVWUHQJWKHQRXU¿QDQFLDOSRVLtion.´'RF-18 at 11.

                                                     16


   Case 1:23-cv-10982-ER           Document 86         Filed 09/29/26       Page 17 of 39


DOOHJDWLRQVGRQRWFKDQJHZKDWWKHGHIHQGDQWVDFWXDOO\VDLG´In re Adobe Inc.

Securities Litigation, No. 23 Civ. 9260 (JGK), 2025 WL 3124312, at *12 (S.D.N.Y. Nov.

7, 2025). ,QVWHDG3ODLQWL൵VUHO\RQWKHWKHRU\WKat 3URMHFW$WKHQD³DIRUPDOSURFHVVWR

UDLVHFDSLWDORUVHOOWKHEXVLQHVV,´ LPSXWHV OLDELOLW\RQto WKH,QGLYLGXDO'HIHQGDQWV,

UHDVRQLQJWKDWWKHSXEOLF VWDWHPHQWVDERXWWKH¿QDQFLDO ZHOO-EHLQJRI)DUIHWFK ZHUH

PDWHULDOO\ PLVOHDGLQJEHFDXVHWKH\ IDLOHGWRGLVFORVHWKHH[LVWHQFHRI3URMHFW$WKHQD.

Doc. 83 at 8. %XWWKHSXUVXLWRIDWDNH-SULYDWHWUDQVDFWLRQGRHVQRWQHFHVVDULO\PHDQ a

FRPSDQ\LVIDFLQJDOLTXLGLW\FULVLV

        $WEHVW3ODLQWL൵VDUJXHWKDWWKHVWDWHPHQWVPDGHE\WKH,QGLYLGXDO'HIHQGDQWV

FUHDWHGWKHEURDGHUQDUUDWLYH WKDWWKH&RPSDQ\ZDVVHOI-IXQGLQJ and did not need

H[WHUQDOFDSLWDO+RZHYHU³3ODLQWL൵V¶VXEMHFWLYHLQWHUSUHWDWLRQRURSLQLRQFDQQRW

VXSSRUWWKHLUFODLPV´ Davison v. Ventrus Biosciences, Inc., No. 13 Civ. 3119 (RMB),

2014 WL 1805242, at *8 6'1<0D\ :LWKRXWD൶UPDWLYHVWDWHPHQWVIURP

DQ\RIWKH,QGLYLGXDO'HIHQGDQWVWKDW)DUIHWFKZDVVHOI-IXQGLQJ DQGGLGQRWQHHGH[WHUQDO

FDSLWDO3ODLQWL൵VIDFHDQXSKLOOEDWWOHWRSURYHWKHLUFODLPV
        a. Omissions
        ๠H,QGLYLGXDO'HIHQGDQWVDUJXHWKDW WKH\KDGQRGXW\WRGLVFORVH3URMHFW$WKHQD

EHFDXVHLWZDVDQ³XQFRQVXPPDWHGWUDQVDFWLRQ>@´'RF80 at 23 n.8. 3ODLQWL൵VDUJXH
WKDWWKH\GLGKDYHDGXW\WRGLVFORVH3URMHFW$WKHQDEHFDXVHLWZDVDGHOLEHUDWHVWUDWHJLF

initiative LQWHQGHGWR³UDLVHFDSLWDOWKURXJKSULYDWL]DWLRQRUDVVHWVDOHV.´ Doc. 83 at 22.

3ODLQWL൵VDVVHUWWKDWWKHGXW\DURVHEHFDXVH)DUIHWFKDVVXUHGLQYHVWRUVRILWV³¿QDQFLDO

VHOI-VX൶FLHQF\ZKLOHVHFUHWO\SXUVXLQJWKHRSSRVLWH´Id.

        ๠HUHDUHWZRDFWLRQDEOHWKHRULHVXQGHUSection  E DQG5XOHE-RIWKH

([FKDQJH$FW
 (1) DQDFWXDOVWDWHPHQWWKDWLV³XQWUXHRXWULJKW´DQG  DKDOI-WUXWK

ZKLFKLVDUHSUHVHQWDWLRQWKDWVWDWHVWKHWUXWKRQO\VRIDUDVLWJRHVZKLOHRPLWWLQJFULWLFDO

TXDOLI\LQJLQIRUPDWLRQ *LPSHOYୡH+DLQ&HOHVWLDO*URXS,QF)WK G

&LU  $FODVVLFH[DPSOHRI a KDOI-WUXWKLV³WKHVHOOHUZKRUHYHDOVWKDWWKHUHPD\EH

                                              17


   Case 1:23-cv-10982-ER           Document 86        Filed 09/29/26       Page 18 of 39


WZRQHZURDGVQHDUDSURSHUW\KHLVVHOOLQJEXWIDLOVWRGLVFORVHWKDWDWKLUGSRWHQWLDOURDG

PLJKWELVHFWWKHSURSHUW\´ Universal Health Services, Inc. v. United States, 579 U.S.

176, 188–89 (2016). $QRWKHUH[DPSOHLVZKHQDFKLOGDWHDZKROHFDNHEXWRQO\WROGKLV

SDUHQWVWKDWKH³KDGGHVVHUW´ Gimpel)WKDWQ TXRWLQJMacquarie

Infrastructure Corp. v. Moab Partners, L. P., 601 U.S. 257, 264 (2024)).

       $QRPLVVLRQLVDFWLRQDEOHRQO\ZKHQWKH FRPSDQ\ LV VXEMHFW to a GXW\ to GLVFORVH

WKHRPLWWHGIDFWV See In re Time Warner Inc. Securities Litigation, 9 F.3d 259, 267 (2d

&LU

  ๠HPHUH RPLVVLRQRIPDWHULDOLQIRUPDWLRQZLWKRXWDGXW\WRGLVFORVH LV not

DFWLRQDEOHXQGHU6HFWLRQ E DQG5XOHE-5. Macquarie, 601 U.S. at %XWRQFHD

FRPSDQ\VSHDNVRQDVXEMHFWPDWWHULWDVVXPHVDGXW\WRPDNH ERWK DFFXUDWHDQG

FRPSOHWH VWDWHPHQWV VRWKH\DUH QRWPLVOHDGLQJZKHQFRQVLGHULQJ WKHFLUFXPVWDQFHVin

ZKLFKWKH\ZHUHPDGHGimpel)WKDW38–39. +RZHYHUDFRPSDQ\GRHVQRW

KDYHDGXW\WRGLVFORVHWKDWLWLVFRQWHPSODWLQJDWUDQVDFWLRQ. In re Miniso Group Holding

Limited Securities Litigation, No. 22 Civ. 9864 (ER), 2026 WL 879334, at *14 (S.D.N.Y.

0DU  FLWLQJIn re Centerline Holding Co. Securities Litigation)$SS¶[



 G&LU ) ¿QGLQJQRD൶UPDWLYHGXW\WRGLVFORVHIXWXUHSODQVZKHQWKH

RPLVVLRQGLGQRWUHQGHURWKHUD൶UPDWLYHVWDWHPHQWVPLVOHDGLQJ
 see Actio v. IMCERA

Group, Inc.)G G&LU

 ¿QGLQJQRGXW\WRGLVFORVHQHJDWLYH

FRQVHTXHQFHVIURPDIDLOHGIDFWRU\LQVSHFWLRQZKHUHLWZDVQRWD³IRUHJRQHFRQFOXVLRQ´

WKDWFRQVHTXHQFHVZRXOGPDWHULDOL]H). 6SHFL¿FDOO\D FRPSDQ\LVQRWUHTXLUHG WRGLVFORVH

WKDWLW³FRQVLGHUHGDWDNH-SULYDWHWUDQVDFWLRQDPRQJRWKHUSRWHQWLDOWUDQVDFWLRQV . . . ´

.UDIWYୡLUG&RDVW0LVWUHDP, No. 19 Civ. 9398 (LJL), 2021 WL 860987, at *18

6'1<0DU .

       )XUWKHUPRUHGLVFXVVLQJDWRSLF³G>RHV@QRWWULJJHUDJHQHUDOL]HGGXW\UHTXLULQJ

GHIHQGDQWVWRGLVFORVHWKHHQWLUHFRUSXVRIWKHLUNQRZOHGJHUHJDUGLQJ>LW@.´ In re Morgan

Stanley Information Fund Securities Litigation
)G G&LU 

3ODLQWL൵VDOOHJHWKDW)DUIHWFKKDGDGXW\WRGLVFORVH3URMHFW$WKHQDEHFDXVHRIWKH

                                              18


    Case 1:23-cv-10982-ER                Document 86           Filed 09/29/26          Page 19 of 39


,QGLYLGXDO'HIHQGDQWV¶³GHFLVLRQWRVSHDNDERXWWKHYHU\VXEMHFWWKRVHGLVFXVVLRQV

FRQWUDGLFWHG.´ Doc. 83 at 22. %XWDVGLVFXVVHG3ODLQWL൵VIDLOWRVKRZKRZ3URMHFW

$WKHQDFRQWUDGLFWVWKHD൶UPDWLYHVWDWHPHQWVWKH,QGLYLGXDO'HIHQGDQWVPDGH3XUVXLQJ

DWDNH-SULYDWHWUDQVDFWLRQGRHVQRWQHFHVVDULO\PHDQDFRPSDQ\LVLQDOLTXLGLW\FULVLV

         3ODLQWL൵VDUJXHWKDWZKHQDcoPSDQ\SXUVXHV D³IRUPDOVWUDWHJLFSURFHVV µLW

PD\FRPHXQGHUDQREOLJDWLRQWRGLVFORVHRWKHUDSSURDFKHVWRUHDFKLQJWKHJRDO¶´Id. at

 TXRWLQJIn re Time Warner, 9 F.3d at 268 +RZHYHUIn re Time Warner LVIDFWXDOO\

GLVWLQFWEHFDXVHWKH6HFRQG&LUFXLWGHWHUPLQHG DFRPSDQ\KDGDGXW\WRGLVFORVHZKHQLW

³HPEDUNHGRQDKLJKO\SXEOLFL]HGFDPSDLJQ´DERXWLWVEXVLQHVVVWUDWHJ\DQGWKHQ

SULYDWHO\ SXUVXHG, and XOWLPDWHO\HQDFWed, DQHQWLUHO\GL൵HUHQWVWUDWHJ\. In re Time

Warner, 9 F.3d at 262. 6 3ODLQWL൵VDUJXe WKDW3URMHFW $WKHQDSDLUHGZLWKWKH,QGLYLGXDO
                           5F


'HIHQGDQWV¶VWDWHPHQWV LVDQDORJRXVWRWKHIDFWVRIIn re Time Warner'RFDWEXW

LWLVXQFOHDUZKDWEXVLQHVVVWUDWHJ\ )DUIHWFK ZDVSXEOLFO\SXUVXLQJZLWKZKLFK 3URMHFW

$WKHQDLVVXSSRVHGO\LQFRQVLVWHQW3ODLQWL൵V¶FRUHDOOHJDWLRQLVWKDWWKH,QGLYLGXDO

'HIHQGDQWV VWDWHGWKDW)DUIHWFKZDV³VHOI-IXQGLQJDQGGLGQRWQHHGH[WHUQDOFDSLWDO´

ZKLOHVHFUHWO\SXUVLQJ3URMHFW$WKHQD, id. at 8QRWWKDW)DUIHWFKSXEOLFO\FODLPHGWKDWit

ZDVSXUVXLQJDVSHFL¿FEXVLQHVVVWUDWHJ\DQGWKHQSULYDWHO\HQJDJHGLQDGL൵HUHQW

VWUDWHJ\. $VVXFK3ODLQWL൵VIDLOWRDOOHJHWKDW)DUIHWFKKDGDGXW\WRGLVFORVH3URMHFW

$WKHQD

         :LWKRXWHVWDEOLVKLQJDGXW\WRGLVFORVH3ODLQWL൵V¶ DUJXPHQWVDERXWZK\WKe

RPLVVLRQRI3URMHFW$WKHQDZRXOGEHPDWHULDOWRDUHDVRQDEOHLQYHVWRUid. at 23, DUH

moot. See Macquarie, 601 U.S. at 265 ³6LOHQFHDEVHQWDGXW\WRGLVFORVHLVQRW


6
  In re Time Warner LVDOVRGLVWLQJXLVKDEOHEHFDXVHWKHFRXUWUHOLHGRQConley¶VQRZRXWGDWHGVWDQGDUG
KROGLQJWKDWD FRXUWVKRXOG³SHUPLWDFRPSODLQWWRVXUYLYHGLVPLVVDOXQOHVV . . . µLWDSSHDUVEH\RQGGRXEW
WKDWWKHSODLQWL൵FDQSURYHQRVHWRIIDFWVLQVXSSRUWRIKLVFODLPZKLFKZRXOGHQWLWOHKLPWRUHOLHI¶´In re
Time Warner
)GDW TXRWLQJ Conley v. Gibson, 355 U.S. 41, 45–46 (1957)). BXWWKH6XSUHPH&RXUW
KDVFODUL¿HGWKDWGLVWULFWFRXUWV VKRXOGGLVPLVVDFRPSODLQWLILWLVQRW³SODXVLEOHRQLWVIDFH.´ Twombly, 550
U.S. at 570.

                                                     19


   Case 1:23-cv-10982-ER           Document 86        Filed 09/29/26      Page 20 of 39


PLVOHDGLQJXQGHU5XOHE–´ TXRWLQJBasic Inc. v. Levinson, 485 U.S. 224, 239 n.17

(1988))). 3ODLQWL൵VKDYHIDLOHGWRVX൶FLHQWO\DOOHJHDQDFWLRQDEOHRPLVVLRQWKHRU\
       b. Non-Actionable Forward-Looking Statements
       ๠H,QGLYLGXDO'HIHQGDQWVDUJXHWKDWWKHVWDWHPHQWV3ODLQWL൵VSRLQWWRDUH

³TXLQWHVVHQWLDOIRUZDUG-ORRNLQJVWDWHPHQWV,´ ZKLFK DUH QRWDFWLRQDEOHEHFDXVHWKH\IDOO

XQGHUWKH36/5$¶V VDIHKDUERU SURYLVLRQV. Doc. 80 at 17–18. 7RVXSSRUWWKLVSRLQWWKH

,QGLYLGXDO'HIHQGDQWVDUJXHWKDWHDFKRI WKHVWDWHPHQWVZHUHLGHQWL¿HGDVIRUZDUG-

ORRNLQJ, LQFOXGHGPHDQLQJIXOFDXWLRQDU\ODQJXDJHDQGQRWHGULVNIDFWRUVWKDWFRXOGDOWHU

WKHSURMHFWLRQV. Id. at 18–20. PlaLQWL൵VFRQWHQGWKDWWKHPLVUHSUHVHQWDWLRQVDQG

RPLVVLRQVGRQRWIDOOXQGHUWKH36/5$¶V VDIHKDUERUSURYLVLRQV EHFDXVH(1) WKH\

GLVFXVVHGFXUUHQWFRQGLWLRQVand (2) WKHFDXWLRQDU\ODQJXDJHZDUQHGRIWKHSRVVLEOH

QHHGIRUIXWXUH¿QDQFLQJZKLOH3URMHFW$WKHQDUHYHDOVWKDW)DUIHWFK ZDVDFWLYHO\

SXUVXLQJ¿QDQFLQJLQWKHSUHVHQW. Doc. 83 at 16–18.

       ๠H36/5$¶VVDIHKDUERUSURYLVLRQSURYLGHVWKDWQROLDELOLW\DWWDFKHVWRa

IRUZDUG-ORRNLQJVWDWHPHQWLILWLV (1) ³LGHQWL¿HGDVDIRUZDUG-ORRNLQJVWDWHPHQWDQGLV

DFFRPSDQLHGE\PHDQLQJIXOFDXWLRQDU\VWDWHPHQWV´  ³LPPDWHULDO´RU   ³WKH

SODLQWL൵IDLOVWRSURYHWKDW>LW@ZDVPDGHZLWKDFWXDONQRZOHGJHE\WKDWSHUVRQWKDW

WKHVWDWHPHQWZDVIDOVHRUPLVOHDGLQJ.´86&†X–5(c)(1). ๠H6HFRQG&LUFXLWKDV
KHOGWKDWVWDWHPHQWVDUHIRUZDUG-ORRNLQJLIWKHVSHDNHUXVHVOLQJXLVWLFFXHVWRVXJJHVWWKH

VWDWHPHQWLVIRUZDUG-ORRNLQJZKHQ WKH\DUH DFFRPSDQLHGE\DQH[SODQDWLRQWKDWWKH

FRPSDQ\LQWHQGVWRPDNHIRUZDUG-ORRNLQJVWDWHPHQWVSlayton v. American Express Co.,

604 F.3d 758, 769 G&LU . )RUH[DPSOHVWDWHPHQWVDERXWDFRPSDQ\¶VXSFRPLQJ

JRDOVDUHIRUZDUG-ORRNLQJVWDWHPHQWVSURWHFWHGE\WKH36/5$see In re Adient plc

Securities Litigation1R&LY
 5$ :/DW  6'1<$SU

 DVDUHVWDWHPHQWVDERXWDFRPSDQ\¶VH[SHFWHG³DELOLW\WRUDLVHFDVKDQGPDLQWDLQD

FDVKEDODQFHVX൶FLHQWWRIXQGFRQWLQXHGLQYHVWPHQWV´Jones v. Perez)$SS¶[

 G&LU 

                                             20


    Case 1:23-cv-10982-ER              Document 86          Filed 09/29/26        Page 21 of 39


        ³7RDYDLOWKHPVHOYHVRIVDIHKDUERUSURWHFWLRQXQGHUWKHPHDQLQJIXOFDXWLRQDU\

ODQJXDJHSURQJGHIHQGDQWVPXVWGHPRQVWUDWHWKDWWKHLUFDXWLRQDU\ODQJXDJHZDVQRW

ERLOHUSODWHDQGFRQYH\HGVXEVWDQWLYHLQIRUPDWLRQ´ Slayton, 604 F.3d at 772; see Villare

v. Abiomed, Inc., No. 19 Civ. 7319 (ER), :/
DW  6'1<6HS

2021) (H[SODLQLQJWKDW³IRUZDUG-ORRNLQJ´VWDWHPHQWV DUH QRWDFWLRQDEOHZKHUH

³FDXWLRQDU\ODQJXDJHZDUQ>HG@RIWKHYHU\ULVNVWKDW>SODLQWL൵@DOOHJHVWKDW[d]HIHQGDQWV

IDLOHGWRGLVFORVH´ . ,I SODLQWL൵V DUJXHWKDWWKHIRUZDUG-ORRNLQJVWDWHPHQWZDVPDGHZLWK

NQRZOHGJHRILWVIDOVLW\SXUVXDQWWRWKHWKLUGSURQJ RIWKHVWDWXWH, WKH\³PXVWVWDWHZLWK

SDUWLFXODULW\ERWKWKHIDFWVFRQVWLWXWLQJWKHDOOHJHGYLRODWLRQDQGWKHIDFWVHYLGHQFLQJ

VFLHQWHUi.e.WKHGHIHQGDQW¶VLQWHQWLRQWRGHFHLYHPDQLSXODWHRUGHIUDXG´ Slayton, 604

)GDW LQWHUQDOTXRWDWLRQVDQGcitationV omitted). 1RWRQO\PXVWSODLQWL൵V ³SOHDG

IDFWVWRVXSSRUWDstrong LQIHUHQFHRIVFLHQWHU´ZKLFKLV³FRJHQWDQGDWOHDVW DV

FRPSHOOLQJDVDQ\RSSRVLQJLQIHUHQFHRIQRQIUDXGXOHQWLQWHQW´EXW³WKHVFLHQWHU

UHTXLUHPHQWIRUIRUZDUG-ORRNLQJVWDWHPHQWVLVVWULFWHUWKDQIRUVWDWHPHQWV RIFXUUHQWIDFW´

EHFDXVHLWFDQQRWUHO\RQUHFNOHVVQHVVEXWRQO\³NQRZLQJIDOVLW\´Id. LQWHUQDOTXRWDWLRQV

DQGFLWDWLRQVomitted).

        3ODLQWL൵VFRQWHQGWKDWWKHVWDWHPHQWVDUHQRWIRUZDUG-ORRNLQJ, SUHFOXGLQJWKH

36/5$¶VVDIHKDUERUSURYLVLRQDOWRJHWKHU, EHFDXVHWKH\DOOHJHWKDWWKH³DVVXUDQFHV RI

)DUIHWFK¶VVX൶FLHQWOLTXLGLW\DQGVHOI-IXQGLQJFRPPXQLFDWHFXUUHQWFRQGLWLRQVQRWIXWXUH

H[SHFWDWLRQV´'RFDW 7 3ODLQWL൵VZLWKRXWSRLQWLQJWRVSHFL¿FVWDWHPHQWVFLWH
                                  6F


SDUDJUDSKV96–RIWKH6$&WRVXSSRUWWKLVSURSRVLWLRQ. Id. 0DQ\RIWKHVWDWHPHQWVLQ

WKLVVHFWLRQFRPHIURP)DUIHWFK¶V&DSLWDO0DUNHWV'D\ˆˆ 97–103. 2QWKDWRFFDVLRQ,

1HYHVUHSUHVHQWHGWKDWKHH[SHFWHG)DUIHWFK³WRFRQWLQXHRQDSDWKRIJURZWKSUR¿WDEOH

JURZWKDQGFDVKÀRZJHQHUDWLRQ´ˆ
-RUGDQVWDWHG
³>:@HKDYHFOHDUYLVLELOLW\WKDW

7
  3ODLQWL൵VDOVRQRWHWKDWDVWDWHPHQWPD\FRQWDLQERWKIRUZDUG-ORRNLQJDQGQRQ-IRUZDUG-ORRNLQJ
VWDWHPHQWVZKLFKDUHVHYHUDEOHIRUWKLVDQDO\VLV'RFDW TXRWLQJIowa Public Employees’
Retirement System v. MF Global, Limited, 620 F.3d 137, 144 G&LU )+RZHYHU3ODLQWL൵VGRQRW
SRLQWWRDQ\VWDWHPHQWWKDWFDQRUVKRXOGEHVHYHUHGId.

                                                   21


   Case 1:23-cv-10982-ER           Document 86         Filed 09/29/26       Page 22 of 39


ZHZLOOGHOLYHUQRWRQO\JURZWKEXWVXVWDLQHGSUR¿WDELOLW\DQGSRVLWLYHIUHHFDVKÀRZ

PRYLQJIRUZDUG´ˆ3ODLQWL൵VDOOHJHWKDWWKH&DSLWDO0DUNHWV'D\event FUHDWHGWKH

IDOVHLPSUHVVLRQWKDW)DUIHWFKZDVFRPPLWWHGWRDFKLHYLQJSUR¿WDELOLW\DQGIUHHFDVKÀRZ

WKURXJKRUJDQLFJURZWKRIH[LVWLQJLQYHVWPHQWVˆ'HVSLWHWKLVDOOHJDWLRQ, 3ODLQWL൵V

IDLOWRDUJXH ZK\WKHVHVWDWHPHQWVDUHQRWIRUZDUG-ORRNLQJ. $OVRDWWKHVWDUWRI&DSLWDO

0DUNHWV'D\WKHLQWURGXFWRU\VSHDNHUVWDWHG

           :HZLOODOVREHPDNLQJIRUZDUG-ORRNLQJVWDWHPHQWVWRGD\ $FWXDO
           UHVXOWV FRXOG GL൵HU PDWHULDOO\ IURP WKRVH IRUZDUG[-ORRNLQJ@
           VWDWHPHQWV DQG ZH XQGHUWDNH QR REOLJDWLRQ WR SXEOLFO\ XSGDWH RU
           UHYLVHWKHP )RUDGLVFXVVLRQRIVRPHRIWKHIDFWRUVWKDWFRXOGFDXVH
           DFWXDOUHVXOWVWRGL൵HUIURPWKHVHIRUZDUG-ORRNLQJVWDWHPHQWVSOHDVH
           UHIHU WR RXU 6(& ¿OLQJV :H ZLOO DOVR UHIHU WR FHUWDLQ QRQ-IFRS
           ¿QDQFLDOPHDVXUHV <RXFDQ¿QGUHFRQFLOLDWLRQVRIWKHVHPHDVXUHV
           WRWKHPRVWGLUHFWO\FRPSDUDEOH,)56¿QDQFLDOPHDVXUHVLQWKHVOLGH
           SUHVHQWDWLRQVZKLFKZLOOEHDYDLODEOHDWIDUIHWFKLQYHVWRUVFRP
Doc. 81-8 at 5. ๠LVVWDWHPHQWDORQJZLWKWKHOLQJXLVWLFFXHVVXFKDV³PRYLQJIRUZDUG´

ˆDQG³FRQWLQXHRQDSDWK´ˆ
SURYLGHVX൶FLHQWJURXQGVWRFRQFOXGHWKDWWKHVH

ZHUHIRUZDUG-ORRNLQJVWDWHPHQWVDFFRPSDQLHGE\PHDQLQJIXOFDXWLRQDU\lDQJXDJH. See

In re BHP Billiton Limited Securities Litigation)6XSSG, 84 (S.D.N.Y. 2017)

(GHWHUPLQLQJWKDW³DGLVFODLPHULGHQWLI\LQJWKHW\SHRIVWDWHPHQW>WKHGHIHQGDQW] PDGHDV

IRUZDUG-ORRNLQJDQGZDUQLQJLQYHVWRUVWKDWDFWXDOUHVXOWVFRXOGGL൵HUIURPSURMHFWHG

UHVXOWV´ZHUH³VX൶FLHQWO\PHDQLQJIXO´FDXWLRQDU\VWDWHPHQWV 

       3ODLQWL൵VDOVRDOOHJHWKDWWKH,QGLYLGXDO'HIHQGDQWVPDGH PDWHULDOO\IDOVHQRQ-

IRUZDUG-ORRNLQJ VWDWHPHQWVGXULQJDQLQYHVWRUFDOOGLVFXVVLQJ 4ˆˆ–105.

'XULQJWKLVFDOO1HYHVVWDWHG WKDW)DUIHWFKZDV³DQHYHQVWURQJHUDQGPRUHH൶FLHQW

RUJDQL]DWLRQ´DQGWKDWKHZDV³PRUHFRQ¿GHQWWKDQHYHU´DERXWWKH&RPSDQ\¶V

³SURVSHFWVWRGHOLYHUJURZWKSUR¿WDELOLW\DQGSRVLWLYHIUHHFDVKÀRZLQDQG

EH\RQG´ ˆ 3KDLUVWDWHG: ³๠HZRUNZH¶YHGRQHWKURXJKRXWDQGWKH\HDUV

SULRULQYHVWLQJLQRXUFXVWRPHUDQGLQRXUSDUWQHUVKLSVZLWKEUDQGVDQGERXWLTXHVSXWVXV

LQDVWURQJSRVLWLRQWRGHOLYHURQRXUJRDOV´ˆ05. $WWKHRXWVHWRIWKLVFDOO


                                              22


   Case 1:23-cv-10982-ER           Document 86        Filed 09/29/26      Page 23 of 39


)DUIHWFKSURYLGHGDVWDWHPHQWWKDWLVVXEVWDQWLDOO\WKHVDPHDVWKHRQHmade on &DSLWDO

0DUNHWV'D\FDXWLRQLQJWKDWVRPHRIWKHVWDWHPHQWVZHUH IRUZDUG-ORRNLQJDoc. 81-10

at 5 (³%HIRUHZHEHJLQZHZRXOGOLNHWRUHPLQG\RXWKDWRXUGLVFXVVLRQVWRGD\ZLOO

LQFOXGHIRUZDUG-ORRNLQJVWDWHPHQWV $FWXDOUHVXOWVFRXOGGL൵HUPDWHULDOO\IURPWKRVH

LQGLFDWHGLQWKHIRUZDUG-ORRNLQJVWDWHPHQWVDQGIRUZDUG-ORRNLQJVWDWHPHQWVPDGHWRGD\

VSHDNRQO\WRRXUH[SHFWDWLRQVDVRIWRGD\´ .

       $GGLWLRQDOO\3ODLQWL൵V SRLQWWR WKH )<)RUP-)¿QDQFLDOUHSRUWLQZKLFK

)DUIHWFKVWDWHG³:HEHOLHYHWKDWRXUVRXUFHVRIOLTXLGLW\DQGFDSLWDOZLOOEHVX൶FLHQWWR

PHHWRXUEXVLQHVVQHHGVIRUDWOHDVWWKHQH[WWZHOYHPRQWKV :HDOVRH[SHFWWKHVH

VRXUFHVRIOLTXLGLW\ZLOOEHVX൶FLHQWWRIXQGRXUORQJ-WHUPFRQWUDFWXDOREOLJDWLRQVDQG

FDSLWDOQHHGV´ ˆ. /LNHZLVHWKLVVWDWHPHQWZDVSUHFHGHGE\DGHWDLOHGFDXWLRQDU\

VWDWHPHQWLGHQWLI\LQJWKHUHPDUNVDVIRUZDUG-ORRNLQJ'RF-12 at 11 ³๠LV$QQXDO

5HSRUWFRQWDLQVVWDWHPHQWVWKDWFRQVWLWXWHµIRUZDUG-ORRNLQJVWDWHPHQWV¶ZLWKLQWKH

PHDQLQJRIWKH>36/5$@ :HLQWHQGVXFKIRUZDUG-ORRNLQJVWDWHPHQWVWREHFRYHUHGE\

WKHVDIHKDUERUSURYLVLRQV . . . . ๠HVHVWDWHPHQWVDUHQHLWKHUSURPLVHVQRUJXDUDQWHHVEXW

LQYROYHNQRZQDQGXQNQRZQULVNV . . . WKDWPD\FDXVHRXUDFWXDOUHVXOWVSHUIRUPDQFHRU

DFKLHYHPHQWVWREHPDWHULDOO\GL൵HUHQW . . . .´ .

       3ODLQWL൵VIXUWKHUDOOHJHWKDWRQ0D\in WKH4(DUQLQJV5HOHDVH

-RUGDQVWDWHGWKDWWKH&RPSDQ\³GHOLYHUHGZKDW>LW@VHWRXWWRDFKLHYH . . . . [IWKDV@

VXFFHVVIXOO\QDYLJDWHGWKURXJKXQSUHFHGHQWHGPDFURFKDOOHQJHVDQGWKURXJKFRQWLQXHG

IRFXVHGH[HFXWLRQ[it] UHPDLQ>V@ RQWUDFNWRGHOLYHUD\HDURIOX[XU\PDUNHW-EHDWLQJ

JURZWKDUHWXUQWRSUR¿WDELOLW\DQGSRVLWLYHIUHHFDVKÀRZ´ ˆ2QFHDJDLQWKLV

RHOHDVH ZDVDFFRPSDQLHGE\DQH[WHQVLYHFDXWLRQDU\VWDWHPHQWLGHQWLI\LQJVRPHRIWKH

ODQJXDJHDVIRUZDUG-ORRNLQJ'RF-16 at 18 ³๠LVUHOHDVHFRQWDLQVIRUZDUG-ORRNLQJ

VWDWHPHQWVZLWKLQWKHPHDQLQJRIWKH [PSLRA]. . . . ๠HVHVWDWHPHQWVDUHQHLWKHU

SURPLVHVQRUJXDUDQWHHVEXWLQYROYHNQRZQDQGXQNQRZQULVNVXQFHUWDLQtiHVDQGRWKHU

LPSRUWDQWIDFWRUVWKDWPD\FDXVHDFWXDOUHVXOWV . . . WREHPDWHULDOO\GL൵HUHQWIURPDQ\

                                              23


   Case 1:23-cv-10982-ER          Document 86        Filed 09/29/26      Page 24 of 39


IXWXUHUHVXOWVSHUIRUPDQFHRUDFKLHYHPHQWVH[SUHVVHGRULPSOLHGE\WKHIRUZDUG-ORRNLQJ

VWDWHPHQWV . . . .´). )RUWKHVDPHUHDVRQVDVDERYHWKHVHVWDWHPHQWVVDWLVI\WKH¿UVWSURQJ

RIWKH36/5$¶VVDIHKDUERUSURYLVLRQSURWHFWLQJWKH IRUZDUG-ORRNLQJVWDWHPHQWVWKDWDUH

³LGHQWL¿HGDVDIRUZDUG-ORRNLQJVWDWHPHQWDQG>DUH@DFFRPSDQLHGE\PHDQLQJIXO

FDXWLRQDU\VWDWHPHQWV´86&†X–5(c)(1).

       3ODLQWL൵VQH[WDUJXHWKDWHYHQLIWKHVWDWHPHQWVZHUHDFFRPSDQLHGE\FDXWLRQDU\

ODQJXDJHWKH\VWLOOdo QRWIDOOXQGHUWKH36/5$¶VVDIHKDUERU EHFDXVHWKH\DOOHJHWKDWWKH

e[LVWHQFHRI3URMHFW$WKHQDUHYHDOVWKDWWKH,QGLYLGXDO'HIHQGDQWVNQHZWKHVHVWDWHPHQWV

WREHIDOVH. Doc. 83 at 16–6SHFL¿FDOO\3ODLQWL൵VFRQWHQGWKDW WKH ,QGLYLGXDO

'HIHQGDQWV¶ GLVFORVXUHVWKDW)DUIHWFK PD\QHHGIXWXUH¿QDQFLQJZDVFRQWUDGLFWHGE\WKHLU

³present FDSLWDO-UDLVLQJH൵RUWV´ Id. at 17. ๠H,QGLYLGXDO'HIHQGDQWVDUJXHWKDWWKH

SOHDGLQJVGRQRWDGHTXDWHO\DOOHJH WKDWWKH\KDG³µDFWXDONQRZOHGJH¶ WKHLU VWDWHPHQWV

ZHUHIDOVH´'RFDW TXRWLQJSlayton, 604 F.3d at 773). 6SHFL¿FDOO\WKH\FRQWHQG

WKDWWKHDOOHJDWLRQVGRQRWEULQJIRUWKQHZLQIRUPDWLRQ FRQWUDGLFWLQJWKHVWDWHPHQWVDQG

VRWKHCRXUWVKRXOGUHMHFWWKHLUFODLPV DVLWKDGLQLWV ¿UVWRSLQLRQGLVPLVVLQJWKH CAC.

Doc. 80 at 21.

       3ODLQWL൵VDUJXHWKDWWKH6$&ZKLFKQRZGLVFXVVHV 3URMHFW$WKHQD, UHYHDOVWKDW

)DUIHWFKZDVIDFLQJDOLTXLGLW\FULVLVUHQGHULQJWKHSRVLWLYHVWDWHPHQWVPDGHE\WKH

'HIHQGDQWVIDOVHDoc. 83 at 13; ˆˆ–86. ,QRUGHUWRVXFFHHGRQWKLVDUJXPHQW

3ODLQWL൵VPXVW³SOHDGIDFWVWRVXSSRUWDstrong LQIHUHQFHRIVFLHQWHU´ZKLFKLV³FRJHQW

DQGDWOHDVWDVFRPSHOOLQJDVDQ\RSSRVLQJLQIHUHQFHRIQRQIUDXGXOHQWLQWHQW´DQGWKH\

FDQQRWUHO\RQUHFNOHVVQHVVEXWRQO\³NQRZLQJIDOVLW\´Slayton, 604 F.3d at 773 LQWHUQDO

TXRWDWLRQVDQGFLWDWLRQVRPLWWHG ๠H&RXUWPXVW WDNHLQWRDFFRXQWDOORIWKHIDFWV

DOOHJHGWKHGRFXPHQWVLQFRUSRUDWHGLQWRWKH6$&DQGSODXVLEOHRSSRVLQJLQIHUHQFHVId.

at 774 FLWLQJTellabs, 551 U.S. at 322–23). 3ODLQWL൵VUHO\RQWKHLUFRQWHQWLRQWKDWWKH

,QGLYLGXDO'HIHQGDQWVNQHZDERXW3URMHFW$WKHQD'RFDWEXWNQRZOHGJHRI a

FDSLWDO-UDLVLQJH൵RUWGRHVQRWUHQGHUDQ\RIWKHVWDWHPHQWVWKH,QGLYLGXDO'HIHQGDQWV

                                             24


    Case 1:23-cv-10982-ER                Document 86           Filed 09/29/26          Page 25 of 39


PDGHIDOVH ๠HH[LVWHQFHRI3URMHFW$WKHQDGRHVQRWQHFHVVDULO\PHDQWKDWWKH

,QGLYLGXDO'HIHQGDQWVNQHZ)DUIHWFKZDVDIDLOLQJEXVLQHVV 1RUGRHVWKH6$&

VX൶FLHQWO\DOOHJHWKDWWKH,QGLYLGXDO'HIHQGDQWVVWDWHGWKDW)DUIHWFKGLGQRWQHHGDQ\

H[WHUQDOFDSLWDOVR3URMHFW$WKHQDGRHVQRWUHQGHUWKHVWDWHPHQWVIDOVH 8            7F


         ๠H,QGLYLGXDO'HIHQGDQWVQRWHWKDWWKURXJKRXWWKLVWLPHWKH\LQFUHDVHGWKHLU

VWRFNKROGLQJV'RFV-3 at 117, 81-12 at 121, 81-22 at 6, ZKLFKLVLQFRQVLVWHQWZLWKDQ

LQIHUHQFHWKDWWKH,QGLYLGXDO'HIHQGDQWVNQHZ)DUIHWFKZDVIDLOLQJDQGWKDWWKHLU

VWDWHPHQWVDERXWLWV¿QDQFLDOZHOO-EHLQJZHUHIDOVH, see Turner v. MagicJack VocalTec,

Limited, No. 13 Civ. 448 (RWS), 2014 WL 406917, at *11 (S.D.N.Y. Feb. 3, 2014)

(¿QGLQJ WKDWSXUFKDVLQJVWRFNGXULQJWKHUHOHYDQWSHULRG UHEXWVDQLQIHUHQFHRIVFLHQWHU 

3ODLQWL൵VKDYHIDLOHGWRDOOHJHIDFWVWKDWSURYLGHD³FRJHQW´LQIHUHQFHRIVFLHQWHUZKLFKLV

³DVFRPSHOOLQJDVDQ\RSSRVLQJLQIHUHQFH´Slayton)GDW LQWHUQDOTXRWDWLRQV

DQGFLWDWLRQVRPLWWHG ๠HUHIRUH3ODLQWL൵VIDLOWRDOOHJHWKDWWKH,QGLYLGXDO 'HIHQGDQWV¶

IRUZDUG-ORRNLQJVWDWHPHQWVZHUHPDGHZLWKNQRZOHGJHRIWKHLUIDOVLW\๠HVHVWDWHPHQWV

IDOOZLWKLQWKH36/5$¶VVDIHKDUERUDQGDUHQRQ-actionable.
         c. Non-Actionable Opinion Statements
         ๠H,QGLYLGXDO'HIHQGDQWVFRQWHQGWKDWDOORIWKH FKDOOHQJHG VWDWHPHQWVLQ WKH

6$&DUHnon-DFWLRQDEOHRSLQLRQV'RF80 at 24. 3ODLQWL൵VGRQRWVSHFLI\ ZKLFK
VWDWHPHQWVDUHnot RSLQLRQVEXW(1) DUJXH WKDWDVWDWHPHQW IDLOVWREHDQRQ-actionable

RSLQLRQZKHQWKHVSHDNHUNQHZRIFRQWUDGLFWLQJPDWHULDOIDFWVDQG   SRLQWWR

Omnicare, Inc. v. Laborers District Council Construction Industry Pension Fund, 575


8
  ๠H,QGLYLGXDO'HIHQGDQWVDOVRDUJXHWKDWDOHWWHUDXWKRUHGE\RXWVLGHFRXQVHO IRU6XUSLTXHFDQQRWVHUYH
WRHVWDEOLVKWKDWWKH,QGLYLGXDO 'HIHQGDQWVNQHZWKHVWDWHPHQWVWKH\PDGHZHUHIDOVH'RF80 at 22–23.
$OWKRXJK3ODLQWL൵VDUJXHWKDWWKHHYLGHQWLDU\ZHLJKWRIWKHOHWWHUVKRXOGQRWEHGHWHUPLQHGRQD5XOH
FKDOOHQJH'RFDW 14WKLV&RXUWGHWHUPLQHVWKDWWKHVHVWDWHPHQWVDUHLQVX൶FLHQWWRDOOHJHWKDWWKH
,QGLYLGXDO'HIHQGDQWVNQHZWKHLUVWDWHPHQWVZHUHIDOVHZKHQWKH\ZHUHPDNLQJWKHPSee Wilbush v.
Ambac Financial Group, Inc.)6XSSG
 6'1< (³>7@KHODZLVDEXQGDQWO\FOHDU
WKDW´ LQFDVHVZKHUHWKHZLWQHVVHVKDGQRFRQWDFWZLWK WKH,QGLYLGXDO'HIHQGDQWVWKHLU³DOOHJDWLRQVDUH
LQVX൶FLHQWWRVXSSRUWVFLHQWHU´) LQWHUQDOTXRWDWLRQVDQGFLWDWLRQVRPLWWHG 6LQFHWKHRXWVLGHFRXQVHO
GUDIWHGWKLVOHWWHUDIWHUWKHDOOHJHGHYHQWVRFFXUUHGDQGKDYHQRGLUHFWFRQQHFWLRQWRDQ\RIWKH,QGLYLGXDO
'HIHQGDQWVLWFDQQRWDGHTXDWHO\VXSSRUWDOOHJDWLRQVRINQRZLQJIDOVLW\DVWRWKHVWDWHPHQWVPDGH

                                                     25


   Case 1:23-cv-10982-ER          Document 86        Filed 09/29/26      Page 26 of 39


U.S. 175 (2015), to contend WKDWWKHRSLQLRQVDUHDFWLRQDEOHVWDWHPHQWV'RF83 at 18–

19. In OmnicareWKH6XSUHPH&RXUWGHWHUPLQHG WKDWDQRSLQLRQVWDWHPHQWLVDFWLRQable

LI HLWKHU(1) WKHVSHDNHUGLGQRWKROGWKHEHOLHIVKHSURIHVVHG (2) WKHVXSSRUWLQJIDFWVKH

VXSSOLHGZHUHXQWUXH, RU   WKHVSHDNHURPLWVLQIRUPDWLRQ ZKRVHRPLVVLRQPDNHVWKH

VWDWHPHQWPLVOHDGLQJWRDUHDVRQDEOHLQYHVWRU575 U.S. at 186, 194. 3ODLQWL൵VIRFXVRQ

WKHWKLUGSURQJDUJXLQJWKDWWKH,QGLYLGXDO'HIHQGDQWV¶VWDWHPHQWVZHUHPLVOHDGLQJ

EHFDXVHWKH\SXUVXHG3URMHFW$WKHQDZKLOHVWDWLQJ WKDW WKH&RPSDQ\KDGVX൶FLHQW

OLTXLGLW\DQGGLGQRWQHHGFDSLWDO'RFDW 19. 'HIHQGDQWVFRQWHQGWKDWWKLVDUJXPHQW

IDLOVEHFDXVH (1) LWUHOLHVRQWKHIDOVHFRQFOXVLRQWKDW3URMHFW$WKHQD³LVV\QRQ\PRXV

ZLWKWKHOLTXLGLW\FULVLVWKDWHPHUJHGLQODWH ´and (2) )DUIHWFK¶VGLVFORVXUHVDUH

FRQVLVWHQWZLWK3URMHFW$WKHQD, Doc. 84 at 9–10, DQGDGGLWLRQDOO\3ODLQWL൵VFDQQRWVKRZ

WKDWWKHVWDWHPHQWVIDOOXQGHUDQ\RIWKHOmnicare SURQJV, Doc. 80 at 25–26.

        ๠H6XSUHPH&RXUWFDXWLRQHGDJDLQVWDQRYHUO\H[SDQVLYHUHDGLQJRIWKLV

VWDQGDUGVWDWLQJWKDW³>U@HDVRQDEOHLQYHVWRUVXQGHUVWDQGWKDWRSLQLRQVVRPHWLPHVUHVWRQ

DZHLJKLQJRIFRPSHWLQJIDFWV´DQGD³UHDVRQDEOHLQYHVWRUGRHVQRWH[SHFWWKDWevery

IDFWNQRZQWRDQLVVXHUVXSSRUWVLWVRSLQLRQVWDWHPHQW´ Omnicare, 575 U.S. at 189–90.

$FFRUGLQJO\DQRSLQLRQVWDWHPHQW³LVQRWQHFHVVDULO\PLVOHDGLQJZKHQDQLVVXHUNQRZV

EXWIDLOVWRGLVFORVHVRPHIDFWFXWWLQJWKHRWKHUZD\¶´ Id. at 189. 0RUHRYHUWKH

6XSUHPH&RXUWKDVHPSKDVL]HGWKDW³tKHLQYHVWRUWDNHVLQWRDFFRXQWWKHFXVWRPVDQG

SUDFWLFHVRIWKHUHOHYDQWLQGXVWU\ 6RDQRPLVVLRQWKDWUHQGHUVPLVOHDGLQJDVWDWHPHQWRI

RSLQLRQZKHQYLHZHGLQDYDFXXPPD\QRWGRVRRQFHWKDWVWDWHPHQWLVFRQVLGHUHGDVLV

DSSURSULDWHLQDEURDGHUIUDPH´ Id. at 190; sHH,QUH$UDWDQDୡHUDSHXWLFV,QF

Securities Litigation)6XSSG 6'1<  ³[T]KH6XSUHPH&RXUW

KDVHPSKDVL]HG>@ VWDWHPHQWVRIRSLQLRQPXVWEHFRQVLGHUHGLQWKHFRQWH[WLQZKLFKWKH\

DULVH´ 

        )LUVW3ODLQWL൵VKDYHIDLOHGWRVX൶FLHQWO\DOOHJHWKDWWKH,QGLYLGXDO'HIHQGDQWV

made DQ\VWDWHPHQW ZKLOHNQRZLQJRILWVIDOVLW\ DQGIDLOHGWRVKRZZK\WKHH[LVWHQFHRI

                                             26


   Case 1:23-cv-10982-ER          Document 86        Filed 09/29/26      Page 27 of 39


3URMHFW$WKHQDUHQGHUVWKHVWDWHPHQWVRIWKH,QGLYLGXDO'HIHQGDQWVIDOVH. ๠HUHIRUH

3ODLQWL൵V¶¿UVWDUJXPHQWIDLOV๠HH[LVWHQFHRI3URMHFW$WKHQDeven ZKHQFRQVLGHUHGin

FRQMXQFWLRQZLWKWKH,QGLYLGXDO'HIHQGDQWV¶SXEOLFVWDWHPHQWVGRHVQRWVX൶FLHQWO\

VXJJHVWWKDWWKH\KDGIUDXGXOHQWLQWHQW 3ODLQWL൵VDOVRIDLOWRDGHTXDWHO\VKRZZK\WKH

SXUVXLWRI3URMHFW$WKHQDPDNHVWKH,QGLYLGXDO'HIHQGDQWV¶RSLQLRQ VWDWHPHQWVIDOVH

       6HFRQG3ODLQWL൵VKDYHIDLOHGWRDGHTXDWHO\SOHDGWKDW)DUIHWFKKDGDGXW\WR

GLVFORVHWKHH[LVWHQFHRI3URMHFW$WKHQDVRWKH\DOVRIDLORQOmnicare¶VWKLUGSURQJ

:LWKRXWDQ\GXW\WRGLVFORVHWKH,QGLYLGXDO'HIHQGDQWVFDQQRWEHKHOGOLDEOHIRUDQ

RPLVVLRQSee Macquarie, 601 U.S. at 265. 3ODLQWL൵V¶WKHRU\WKDWWKHRPLVVLRQZDV

PLVOHDGLQJDOVRUHOLHVRQWKHQRWLRQWKDWWKH,QGLYLGXDO'HIHQGDQWVVDLGWKDW)DUIHWFKKDG

VX൶FLHQWOLTXLGLW\DQGGLGQRWneed H[WHUQDOFDSLWDOZKLFKWKH\KDYHQRWDGHTXDWHO\

DOOHJHG.
       d. Non-Actionable &RUSRUDWH2SWLPLVPRU3XৼHU\
       ๠H,QGLYLGXDO'HIHQGDQWVDUJXHWKDWPDQ\RIWKHVWDWHPHQWVLQWKH6$&DUHQRQ-

DFWLRQDEOHSX൵HU\ EHFDXVHWKHVWDWHPHQWV DUHWRRJHQHUDODQG ³DUH>QRW@IUDPHGDV

JXDUDQWHHV´RU³WHWKHUHGWRVSHFL¿FYHUL¿DEOHIDFWV´ Doc. 80 at 26–27. 3ODLQWL൵VDUJXH

WKDWWKH,QGLYLGXDO'HIHQGDQWV¶UHSHDWHGDVVXUDQFHV ³WKDW)DUIHWFKKDGVX൶FLHQWOLTXLGLW\

ZDVVHOI-IXQGLQJDQGGLGQRWQHHGWRUDLVHFDSLWDO´ DUHQRWPHUHSX൵HU\EHFDXVHWKH\
FRQYH\PDWHULDOSUHVHQWIDFWVDERXWWKH&RPSDQ\Doc. 83 at 19. 3ODLQWL൵VSRLQWWRWKH

VWDWHPHQWWKDW)DUIHWFK³KDVVX൶FLHQWOLTXLGLW\IRUWKHQH[WPRQWKV>ZKLFKWKH\DUJXH@

QHFHVVDULO\ UHSUHVHQWVWKDWLWKDVVX൶FLHQWOLTXLGLW\´in WKHSUHVHQW. Id. at 20. ๠LVDQG

VLPLODUVWDWHPHQWV3ODLQWL൵VFRQWHQGDUHDVVHUWLRQVDERXWWKH&RPSDQ\¶VFXUUHQW

¿QDQFLDOFRQGLWLRQ DQGDUHPLVOHDGLQJEHFDXVHRIWKH³FRQWHPSRUDQHRXVSXUVXLWRI

3URMHFW$WKHQD´Id. ๠H,QGLYLGXDO'HIHQGDQWVUHDVVHUWWKHLUFRQWHQWLRQWKDWQRQHRIWKH

VWDWHPHQWVLQWKH6$&ZHUH ³µFRQFUHWHUHSUHVHQWDWLRQV¶ WKDW)DUIHWFKµwas VHOI-IXQGLQJ

and did not need H[WHUQDOFDSLWDO¶´'RFDW–11 TXRWLQJ'RF83 at 19–20).


                                             27


   Case 1:23-cv-10982-ER          Document 86        Filed 09/29/26      Page 28 of 39


       )RUDVWDWHPHQWWREHDFWLRQDEOH³WKHUHSUHVHQWDWLRQPXVWEHRQHRIH[LVWLQJIDFW

DQGQRWPHUHO\DQH[SUHVVLRQRIRSLQLRQH[SHFWDWLRQRUGHFODUDWLRQRILQWHQWLRQ´ In re

Duane Reade Inc. Securities Litigation, No. 2 Civ. 6478 (NRB), 2003 WL 22801416, at

*4 (S.D.N.Y. Nov. 25, 2003) TXRWLQJGreenberg v. Chrust)6XSSG

(S.D.N.Y. 2003), Dৼ¶GVXEQRP 1DGRৼY'XDQH5HDGH,QF)$SS¶[ G&LU

2004). ³*HQHUDOL]HGVWDWHPHQWVUHJDUGLQJDFRPSDQ\¶V¿VFDOGLVFLSOLQHDQGULVN

PDQDJHPHQWDPRXQWWRQRPRUHWKDQLQDFWLRQDEOHSX൵HU\´In re New York Community

Bancorp, Inc., Securities Litigation)6XSSG80 (E.D.N.Y 2006) FLWLQJ In

re JP Morgan Chase Securities Litigation, 363 F. 6XSS 2d 595, 633 (S.D.N.Y. 2005)).

       +RZHYHU³>V@WDWHPHQWVUHJDUGLQJSURMHFWLRQVRIIXWXUHSHUIRUPDQFHPD\EH

DFWLRQDEOHXQGHUSection  E RU5XOHE-LIWKH\DUHZRUGHGDVJXDUDQWHHVRUDUH

VXSSRUWHGE\VSHFL¿FVWDWHPHQWVRIIDFWRULIWKHVSHDNHUGRHVQRWJHQXLQHO\RU

UHDVRQDEO\EHOLHYHWKHP´ In re International Business Machines Corporate Securities

Litigation)G G&LU

  LQWHUQDOFLWDWLRQVRPLWWHG
see also Gissin v.

Endres
)6XSSG 6'1<  ³[S]WDWHPHQWVDUHQRWSURWHFWHGZKHUH

GHIHQGDQWVKDGQREDVLVIRUWKHLURSWLPLVWLFVWDWHPHQWVDQGDOUHDG\NQHZ DOOHJHGO\ WKDW

FHUWDLQULVNVKDGEHFRPHUHDOLW\.´ LQWHUQDOTXRWDWLRQVRPLWWHG ).

       AVLQWKHSUHYLRXVRSLQLRQRIWKLV&RXUWWKHVWDWHPHQWVWRZKLFK3ODLQWL൵V SRLQW

DUHnot actionable. 6WDWHPHQWVDERXWDFRPSDQ\EHLQJ³EDFNWRJURZWK´DUHQRW

VX൶FLHQWO\VSHFL¿FRUFRQFUHWHWRPLVOHDGUHDVRQDEOHLQYHVWRUV See Villare, 2021 WL

4311749, at *15; Gissin
)6XSSGDW–12 ¿QGLQJWKHGHIHQGDQW¶VVWDWHPHQW

WKDWWKHFRPSDQ\³FRQWLQXHVWRPDLQWDLQDVWURQJEDODQFHVKHHW´ZDVPHUHSX൵HU\

EHFDXVHLWGLGQRW³R൵HUDQ\RIWKHµORQJ-WHUPJXDUDQWHHV¶RUVSHFL¿FVZKLFKZRXOG

FRQYHUWDQRSLQLRQRUSURMHFWLRQLQWRDIDFWXDOPLVUHSUHVHQWDWLRQ´
 Livingston v.

Cablevision Systems Corp.
)6XSSG ('1< ¿QGLQJ a

VWDWHPHQWWKDWDFRPSDQ\³µFDQFRQWLQXHWRSURYLGHVXSHULRUSURGXFWVVXSHULRUFXVWRPHU

VHUYLFHDQGFRPSHWHDJJUHVVLYHO\DQGFRQWLQXHWRJURZ¶LVTXLQWHVVHQWLDOLQDFWLRQDEOH

                                             28


   Case 1:23-cv-10982-ER           Document 86        Filed 09/29/26      Page 29 of 39


SX൵HU\´ . ๠HUHIRUHWKH,QGLYLGXDO'HIHQGDQWV¶VWDWHPHQWV VXFKDV )DUIHWFKKDG³DOOWKH

NH\HOHPHQWVWRH[HFXWHRQ>LWV@ SODQ´DQG ³>W@KHZRUNZH¶YHGRQHSXWVXVLQDVWURQJ

SRVLWLRQWRGHOLYHURQRXUJRDOV,´ ˆˆ–FRQVWLWXWHnon-DFWLRQDEOHSX൵HU\

       3ODLQWL൵VDUJXHWKDW)DUIHWFK¶VFODLPWKDWLW ZLOOKDYH³VX൶FLHQWOLTXLGLW\IRUWKH

QH[WPRQWKV´LPSOLHVWKDWLWSUHVHQWO\KDGVX൶FLHQWOLTXLGLW\ZKLFKLV VSHFL¿FDQG

PLVOHDGLQJ'RFDW๠HRQO\WKLQJ3ODLQWL൵VDUJXHPDNHVWKLVPLVOHDGLQJLVWKH

H[LVWHQFHRI3URMHFW$WKHQDId. 2QFHDJDLQ3ODLQWL൵VIDLOWRDGHTXDWHO\H[SODLQZK\WKH

H[LVWHQFHRI3URMHFW$WKHQDQHFHVVDULO\PHDQVWKDWDVWDWHPHQWWKDW)DUIHWFKKDVVX൶FLHQW

OLTXLGLW\LQWKHSUHVHQWRUIRUWKHQH[WPRQWKVIRUWKDWPDWWHULVPLVOHDGLQJ. $OVRDV

WKH,QGLYLGXDO'HIHQGDQWVDUJXHQRZKHUHLQWKH6$&GRWKH ,QGLYLGXDO'HIHQGDQWV claim

WKDW)DUIHWFKZDVVHOI-IXQGLQJDQGGLGQRWQHHGH[WHUQDOFDSLWDOSee Doc. 78. ๠H&RXUW

QHHGQRWDQVZHUZKHWKHU WKLVFKDOOHQJHGVWDWHPHQWLV VSHFL¿FHQRXJKQRWWRTXDOLI\DV

SX൵HU\ EHFDXVHit LVSULPDULO\DSURMHFWLRQDERXWWKHIXWXUH, ZDVTXDOL¿HGE\³>Z@H

believe,´and ZDVDFFRPSDQLHG E\FDXWLRQDU\ODQJXDJH. ˆ; see 86&†X–

 F   VWDWLQJWKDWWKH36/5$¶VVDIHKDUERUSURYLVLRQSURYLGHVWKDWQROLDELOLW\DWWDFKHV

WRDIRUZDUG-ORRNLQJVWDWHPHQWLILWLV³LGHQWL¿HGDVDIRUZDUG-ORRNLQJVWDWHPHQWDQGLV

DFFRPSDQLHGE\PHDQLQJIXOFDXWLRQDU\VWDWHPHQWV´ 

       $FFRUGLQJO\3ODLQWL൵VKDYHIDLOHGWR DGHTXDWHO\ DOOHJHWKDWWKH,QGLYLGXDO

'HIHQGDQWVPDGHPDWHULDOO\PLVOHDGLQJVWDWHPHQWVRURPLVVLRQV
           3ODLQWLৼV'R1RW$OOHJHD6WURQJ,QIHUHQFHRI6FLHQWHU
       ๠H,QGLYLGXDO'HIHQGDQWVDVVHUWWKDW3ODLQWL൵VKDYHQRWVX൶FLHQWO\SOHDGHGD

FRJQL]DEOHPRWLYHRUWKe UHTXLVLWH³FRUUHVSRQGLQJO\JUHDWHU´VKRZLQJRI³FRQVFLRXV

PLVEHKDYLRURUUHFNOHVVQHVV´ZKHQPRWLYHLVDEVHQW Doc. 80 at 29–๠H\DUJXHWKDW

3ODLQWL൵VGLGQRWVKRZDQ\FRQFUHWHEHQH¿WWKDWWKH,QGLYLGXDO'HIHQGDQWVUHFHLYHGIDLO

WRDOOHJHPRWLYHDQGGLGQRWSRLQWWRIDFWVVKRZLQJWKH\ZHUHDZDUHWKDWWKHLUVWDWHPHQWV

ZHUHRUWKDWWKHUHZDVDJRRGFKDQFHWKDWWKH\ZHUHIDOVHRUPLVOHDGLQJIDLOLQJWRDOOHJH

FRQVFLRXVPLVEHKDYLRURUUHFNOHVVQHVVId. 3ODLQWL൵VDUJXHWKDWWKH\KDYHDGHTXDWHO\

                                             29


   Case 1:23-cv-10982-ER           Document 86         Filed 09/29/26      Page 30 of 39


DOOHJHGVFLHQWHUEHFDXVHWKH\DOOHJHWKDWWKH,QGLYLGXDO'HIHQGDQWVZHUH³GLUHFWO\

LQYROYHG´LQ3URMHFW$WKHQDWRUDLVHFDSLWDORUVHOOWKHEXVLQHVVZKLOHVWDWLQJWKDW

³)DUIHWFKZDVVHOI-IXQGLQJDQGGLGQRWQHHGH[WHUQDOFDSLWDO´'RFDW๠H\

FRQWHQGWKDWWKH,QGLYLGXDO'HIHQGDQWVWKURXJKWKHLUSRVLWLRQVHDFKKDGGLUHFW

LQYROYHPHQWLQ3URMHFW$WKHQDDQGKDGD³FRQFUHWHPRWLYH . . . WRVWDYHR൵EDQNUXSWF\

DQGPDLQWDLQLWVFUHGLWDFFHVVORQJHQRXJKWRFRPSOHWH3URMHFW$WKHQD´Id. at 24–25.

       7RVDWLVI\WKH36/5$¶VSOHDGLQJUHTXLUHPHQWVIRUVFLHQWHUDSODLQWL൵PXVWDOOHJH

IDFWVZLWKSDUWLFXODULW\WKDWZRXOGJLYH³ULVHWRDVWURQJLQIHUHQFHWKDWWKHGHIHQGDQWDFWHG

ZLWKWKHUHTXLUHGVWDWHRIPLQG´ ECA, Local 134 IBEW Joint Pension Trust of Chicago

v. JP Morgan Chase Co., 553 F.3d 187, 196 G&LU
 TXRWLQJ 86&†X–

4(b)(1), (2))$VWURQJLQIHUHQFHWKDWDGHIHQGDQWDFWHGZLWKDFHUWDLQLQWHQWLVRQHWKDWLV

³PRUHWKDQPHUHO\SODXVLEOHRUUHDVRQDEOH—LWPXVWEHFRJHQWDQGDWOHDVWDVFRPSHOOLQJ

DVDQ\RSSRVLQJLQIHUHQFHRIQRQIUDXGXOHQWLQWHQW´ Tellabs, 551 U.S. at 314.

       ๠LVLQTXLU\JRHVEH\RQGWKHRUGLQDU\ 5XOH
 E IUDPHZRUNDQGUHTXLUHVFRXUWVWR

FRQVLGHU³QRWRQO\LQIHUHQFHVXUJHGE\WKHSODLQWL൵EXWDOVRFRPSHWLQJLQIHUHQFHV

UDWLRQDOO\GUDZQIURPWKHIDFWVDOOHJHG´ Id. ³๠HUHOHYDQWLQTXLU\IRUWKH&RXUWµLV

ZKHWKHU all RIWKH IDFWVDOOHJHGWDNHQFROOHFWLYHO\JLYHULVHWRDVWURQJLQIHUHQFHRI

VFLHQWHUQRWZKHWKHUDQ\ individual DOOHJDWLRQVFUXWLQL]HGLQLVRODWLRQPHHWVWKDW

VWDQGDUG¶´ In re Magnum Hunter Resources Corp. Securities Litigation, 26 F. 6XSS 3d

278, 299 (S.D.N.Y. 2014) TXRWLQJ Tellabs, 551 U.S. at 322–23).

       $SODLQWL൵PD\HVWDEOLVKVFLHQWHUE\DOOHJLQJIDFWVWKDWHLWKHU   VKRZWKDWWKH

GHIHQGDQWKDGERWKWKH³PRWLYHDQGRSSRUWXQLW\´WRFRPPLWWKHDOOHJHGIUDXGRU  

³FRQVWLWXWHVWURQJFLUFXPVWDQWLDOHYLGHQFHRIFRQVFLRXVPLVEHKDYLRURUUHFNOHVVQHVV´

Lerner v. Fleet Bank, N.A., 459 F.3d 273, 290–
 G&LU 7\SLFDOO\³RUGLQDU\

PRWLYHVSRVVHVVHGE\YLUWXDOO\DOOFRUSRUDWHLQVLGHUV´DUH LQVX൶FLHQWWRSOHDGVFLHQWHU In

re Plug Power, Inc. Securities Litigation, No. 21 Civ. 2004 (ER), 2022 WL 4631892, at

  6'1<6HS
 

                                              30


    Case 1:23-cv-10982-ER               Document 86           Filed 09/29/26          Page 31 of 39


         a. 3ODLQWLৼV’ $OOHJDWLRQVRI0RWLYHDUH,QVX৽FLHQW
         3ODLQWL൵VDUJXH WKDW)DUIHWFKKDGDFOHDUPRWLYH
³WRVWDYHR൵EDQNUXSWF\DQG

PDLQWDLQLWVFUHGLWDFFHVVORQJHQRXJKWRFRPSOHWH3URMHFW$WKHQD´'RFDW๠H

,QGLYLGXDO'HIHQGDQWVDUJXHWKDWWKLVDOOHJDWLRQLVLQVX൶FLHQWEHFDXVHWKRVHWZRGHVLUHV

DUHKHOGE\YLUWXDOO\DOOEXVLQHVVHVDQGWKHUHIRUHGRQRWDGHTXDWHO\DOOHJHDIUDXGXOHQW

motive. Doc. 84 at 12. 9 ๠H,QGLYLGXDO'HIHQGDQWVDUJXHWKDW3ODLQWL൵VWKXVIDLOHGWR
                           8F


DOOHJHDFOHDUEHQH¿WREWDLQHGE\WKHPIURPWKHDOOHJHGIUDXGDQGDOVRIDLOHGWRFRQWHQG

ZLWKWKHIDFWWKDWHDFKRIWKHPLQFUHDVHGRUUHWDLQHGWKHLUVWRFNKROGLQJVGXULQJWKH&ODVV

3HULRG'RFDW


         ๠HEDVLVRI3ODLQWL൵V¶DOOHJDWLRQLVWKDWWKH,QGLYLGXDO'HIHQGDQWVSXUVXHGDQ

LQLWLDWLYH³WRUDLVHFDSLWDO´ZKLOHWHOOLQJLQYHVWRUVWKH\GLGQ¶WQHHGFDSLWDOHVWDEOLVKLQJ

VFLHQWHU'RFDW%XW, ³FRXUWVLQ WKLVGLVWULFWKDYHJHQHUDOO\IRXQGDOOHJDWLRQV

UHJDUGLQJWKHGHVLUHWRUDLVHFDSLWDOLQDGHTXDWHWRSOHDG VFLHQWHU´ In re Plug Power, 2022

WL 4631892, at ๠HH[LVWHQFHRI3URMHFW$WKHQDGRHVQRWFUHDWHDVWURQJLQIHUHQFH

WKDWWKH,QGLYLGXDO'HIHQGDQWVDFWHGZLWKIUDXGXOHQWLQWHQWZKHQWKH\PDGHSXEOLF

VWDWHPHQWVDERXW)DUIHWFK¶V¿QDQFLDOZHOO-EHLQJ3ODLQWL൵VDUJXHWKDWWKH&RPSDQ\¶V

PRWLYHZDVWR³VWDYHR൵EDQNUXSWF\DQGPDLQWDLQLWVFUHGLWDFFHVV´ZKLFKWKH\FRQWHQG

³LVDVSHFL¿FDOOHJDWLRQWKDWWKHIUDXGHQDEOHGDVSHFL¿FWUDQVDFWLRQ´'RFDW–26.
+RZHYHUFRXUWVKDYHIRXQGWKDWDQDOOHJDWLRQWKDWWKHGHIHQGDQWVDFWHGWR³DYRLG

EDQNUXSWF\´LVLQVX൶FLHQWEHFDXVHLWLVDPRWLYHFRPPRQWRDOOFRUSRUDWLRQVSaraf v.

Ebix, Inc., No. 23 Civ. :/
DW  G&LU0DU &RXUWV

KDYHDOVRIRXQGDOOHJDWLRQVWKDWDFRPSDQ\³ZDQWHGWRPDLQWDLQWKHDSSHDUDQFHRI

SUR¿WDELOLW\DQGDFFHVVWRFDSLWDO´DUH LQVX൶FLHQWWRDOOHJHVFLHQWHUHarris v. AmTrust


9
 3ODLQWL൵VDOVRFRQWHQG³>W@KH6$&DOOHJHVWKDW)DUIHWFKQHHGHGWRSUHVHUYHLWVUHODWLRQVKLSZLWK-3
0RUJDQZKLFKZDVVLPXOWDQHRXVO\DGYLVLQJRQ3URMHFW$WKHQDDQGSURYLGLQJFUHGLWIDFLOLWLHVWRIXQG
RSHUDWLRQVWKURXJKWKHFRPSOHWLRQRIWKHXQGLVFORVHGWUDQVDFWLRQ´'RFDW FLWLQJ'RFˆ
 
+RZHYHU   WKH6$&GRHVQRWPDNHWKLVDOOHJDWLRQPHUHO\GLVFXVVLQJDFUHGLWDJUHHPHQWEHWZHHQ
)DUIHWFKand -30RUJDQ'RFˆ
DQG   3ODLQWL൵VIDLOWRH[SODLQKRZWKLVGL൵HUVIURPRUGLQDU\
PRWLYHVRIDEXVLQHVV

                                                     31


   Case 1:23-cv-10982-ER            Document 86        Filed 09/29/26       Page 32 of 39


Financial Services, Inc.)6XSSG 6'1<2015), Dৼ¶G, 
)$SS¶[

G&LU 

        3ODLQWL൵VFRQWHQd WKDW³>W@KLVLVQRWDJHQHULFDOOHJDWLRQ´EHFDXVHFRXUWVKDYH

IRXQGWKDWPRWLYHLVVX൶FLHQWO\HVWDEOLVKHG³ZKHQDFRPSDQ\LVLQGLUHQHHGRIIXQGVIRU

VXUYLYDO´'RFDW TXRWLQJLeone v. ASP Isotopes Inc.)6XSSG

(S.D.N.Y. 2025)); see also 6NLDGDVY$FHUୡHUDSHXWLFV,QF, No. 19 Civ. 6137 (GHW),

:/
DW  6'1<-XQH  ³>&@RXUWVKDYHIRXQGDOOHJDWLRQVRI

PRWLYHDGHTXDWHZKHUHWKHFRPSDQ\¶VQHHGHGWRIXQGUDLVHWRVXUYLYH´ +RZHYHULQLWV

DQDO\VLVWKLV&RXUWPXVWnot ORRNWR DQ\ IDFW LQLVRODWLRQEXWPXVWDVVHVV³ZKHWKHUall RI

WKHIDFWVDOOHJHGWDNHQFROOHFWLYHO\JLYHULVHWRDVWURQJLQIHUHQFHRIVFLHQWHU´In re

Magnum, 26 F. 6XSS GDW

 TXRWLQJ Tellabs, 551 U.S. at 322–23). AVWKLV&RXUW

QRWHGLQLWVGLVFXVVLRQRIPRWLYHLQLWVSULRURSLQLRQ'RFDWWKHSXUFKDVHRI VWRFN

GXULQJWKHFODVVSHULRG UHEXWVDQLQIHUHQFHRIVFLHQWHU Turner, 2014 WL 406917, at *11.

        $OWKRXJK3ODLQWL൵VGRDOOHJHWKDW)DUIHWFKZDVLQVLJQL¿FDQW¿QDQFLDOGLVWUHVVˆ 5,

WKHLUDOOHJDWLRQVRIPRWLYHUHO\SULPDULO\RQ³RUGLQDU\PRWLYHVSRVVHVVHGE\YLUWXDOO\DOO

FRUSRUDWHLQVLGHUV´In re Plug Power, 2022 WL 4631892, at */RRNLQJat WKHDOOHJHG

IDFWVDVDZKROHLQFOXGLQJWKHLQFUHDVHGVWRFNKROGLQJVRIWKH,QGLYLGXDO'HIHQGDQWVsee

'RFV-3 at 117, 81-12 at 121, 81-DW3ODLQWL൵VKDYHIDLOHGWRDGHTXDWHO\DOOHJH

motive.
        b. 3ODLQWLৼV’ Allegations of Reckless Disregard or “Circumstantial” Scienter are
           ,QVX৽FLHQW
        ๠H,QGLYLGXDO'HIHQGDQWVDUJXHWKDW3ODLQWL൵VKDYHIDLOHGWRDOOHJHWKDWWKH\

DFWHGZLWKFRQVFLRXVPLVEHKDYLRURUUHFNOHVVQHVV'RFDW3ODLQWL൵VIXUWKHU DUJXH

WKDW(1) IRUPHUHPSOR\HH³DOOHJDWLRQVSURYLGHFRQWH[W´   WKH³IUDXGWRXFKHGFRUH

RSHUDWLRQV´DQG  ³WHPSRUDOSUR[LPLW\VXSSRUWVVFLHQWHU´'RFDW–28.

'HIHQGDQWVDUJXHWKDWWKHVHDOOHJDWLRQVDUHLQVX൶FLHQWWRHVWDEOLVKVFLHQWHUDGGLQJWKDW


                                               32


   Case 1:23-cv-10982-ER           Document 86         Filed 09/29/26      Page 33 of 39


VLQFHWKHDOOHJHGIUDXGUHVXOWHGLQWKH'HIHQGDQWV¶³RZQPDVVLYH¿QDQFLDOORVVHV´WKH

PRUHFRPSHOOLQJLQIHUHQFHLVDQRQ-FXOSDEOHRQHDoc. 84 at 13–14.

       :KHQDSODLQWL൵IDLOVWRDOOHJHDPRWLYHWRFRPPLWIUDXGWKHSODLQWL൵¶VDOOHJDWLRQV

WKDWLQGLFDWHDGHIHQGDQW¶VUHFNOHVVQHVV³PXVWEHFRUUHVSRQGLQJO\JUHDWHU´Kalnit v.

Eichler)G G&LU  LQWHUQDOTXRWDWLRQV and FLWDWLRQVRPLWWHG 

3ODLQWL൵VPXVWSOHDGFRQGXFWWKDWLV³KLJKO\XQUHDVRQDEOH´RUUHÀHFWV³DQH[WUHPH

GHSDUWXUH´IURPWKHVWDQGDUGVRIRUGLQDU\FDUHBoard of Trustees of City of Ft.

Lauderdale General Employees’ Retirement System v. Mechel OAO)6XSSG

869 (S.D.N.Y 2011), Dৼ¶GVXEQRP)UHGHULFNY0HFKHO2$2)$SS¶[ G&LU

2012). 2IWHQWKLVLVVDWLV¿HGE\ SOHDGLQJSDUWLFXODUL]HGIDFWVWKDWVKRZWKDWWKH

GHIHQGDQWVKDG³NQRZOHGJHRIIDFWVRUDFFHVVWRLQIRUPDWLRQFRQWUDGLFWLQJWKHLUSXEOLF

VWDWHPHQWV´Kalnit)GDW3ODLQWL൵VPXVWLGHQWLI\WKH VSHFL¿F UHSRUWVRU

VWDWHPHQWVFRQWDLQLQJWKHFRQWUDU\ LQIRUPDWLRQ. Mechel OAO)6XSSGDW
.

       8QGHUWKH³FRQVFLRXVPLVEHKDYLRURUUHFNOHVVQHVV´SURQJWRTXDOLI\DV³VWURQJ´

WKHLQIHUHQFHRIVFLHQWHUIURPWKHIDFWVDOOHJHG³PXVWEHPRUHWKDQPHUHO\SODXVLEOHRU

UHDVRQDEOH´ Tellabs86DW,IDQLQIHUHQFHRIIUDXGXOHQWLQWHQWLVQRW³DWOHDVW

DVFRPSHOOLQJ´DVDFRQWUDU\LQIHUHQFHLWLVLQDGHTXDWHHYHQLQD³FORVHFDVH´ Slayton,

604 F.3d at ³๠XVDFRPSODLQWZKLFKIDLOVWRDGGXFHDQ\VSHFL¿FIDFWVVXSSRUWLQJ

DQLQIHUHQFHRINQRZOHGJHDEOHSDUWLFLSDWLRQLQWKHDOOHJHGIUDXGZLOOQRWVDWLVI\HYHQD

UHOD[HGVWDQGDUG´ Faulkner v. Verizon Communications, Inc., )6XSSG


(S.D.N.Y 2001) (LQWHUQDOTXRWDWLRQVDQGcitationV omitted).

       ๠HSULRURSLQLRQRIWKLV&RXUWGLUHFWO\DGGUHVVHd DQGUHMHFWed 3ODLQWL൵V¶

FRQWHQWLRQVDERXWWKHIRUPHUHPSOR\HH DOOHJDWLRQVDQGWKDWWKHIUDXGWRXFKHGWKH

&RPSDQ\¶VFRUHRSHUDWLRQV'RFDW
–41.

       ,QUHJDUGWRWKHIRUPHUHPSOR\HH DOOHJDWLRQVSURYLGLQJFRQWH[W³>L@ISODLQWL൵VUHO\

RQDOOHJDWLRQVWKDWWKHGHIHQGDQWVKDGDFFHVVWRIDFWVFRQWUDGLFWLQJWKHLUSXEOLF

VWDWHPHQWVSODLQWL൵VPXVWVSHFL¿FDOO\LGHQWLI\WKHUHSRUWVRUVWDWHPHQWVFRQWDLQLQJWKLV

                                              33


   Case 1:23-cv-10982-ER           Document 86        Filed 09/29/26      Page 34 of 39


LQIRUPDWLRQ´ In re General Electric Co. Securities Litigation, 856 F. 6XSSG


(S.D.N.Y. 2012) (LQWHUQDOTXRWDWLRQPDUNVDQGFLWDWLRQRPLWWHG ๠H6$&RQO\DOOHJHV

WKDWRQHRIWKHIRUPHUHPSOR\HHV)(VSRNHWRDQ\RIWKH,QGLYLGXDO'HIHQGDQWVˆ

³>7@KHODZLVDEXQGDQWO\FOHDUWKDW´ LQFDVHVZKHUHWKHZLWQHVVHVKDGQRFRQWDFWZLWKWKH

iQGLYLGXDOdHIHQGDQWVWKHLU³DOOHJDWLRQVDUHLQVX൶FLHQWWRVXSSRUWVFLHQWHU´ Wilbush v.

Ambac Financial Group, Inc.)6XSSG
 6'1< LQWHUQDO

TXRWDWLRQV DQGFLWDWLRQV omitted). )(DOOHJHVWKDWLQ$SULO-RUGDQVDLGWKDWPDMRU

LQYHVWRUVPD\SXOOWKHLUIXQGLQJEHFDXVHRIORQJVWDQGLQJLQWHUQDOGH¿FLHQFLHV. ˆ$V

GHWHUPLQHGE\WKLV&RXUWEHIRUHWKLVDOOHJDWLRQLVLQVX൶FLHQWWRDGHTXDWHO\DOOHJH

VFLHQWHUSee Doc. 73 at 39–40.

       3ODLQWL൵VDOVRDOOHJHDFRUHRSHUDWLRQVWKHRU\DUJXLQJWKDWWKH,QGLYLGXDO

'HIHQGDQWVNQHZDERXWWKHDOOHJHGRPLVVLRQVEHFDXVHWKH\FRQFHUQHG mDWWHUVFHQWUDOWR

)DUIHWFK¶V EXVLQHVVDQGVXUYLYDO'RFDW+RZHYHUDVVWDWHGLQWKLV&RXUW¶V

SUHYLRXVRSLQLRQ'RFDW–41, WKH³FRUHRSHUDWLRQV´WKHRU\DWPRVWFRQVWLWXWHV

³VXSSOHPHQWDOVXSSRUW´IRUDOOHJLQJVFLHQWHUEXWGRHVQRWLQGHSHQGHQWO\HVWDEOLVK

VFLHQWHUsee New Orleans Employees Retirement System v. Celestica, Inc.)$SS¶[

10, 14 Q G&LU  GHFOLQLQJWRGHFLGHZKHWKHUWKHIDFWWKDWWKHDOOHJHG

PLVUHSUHVHQWDWLRQVUHODWHGWRWKHGHIHQGDQW¶V³FRUHRSHUDWLRQV´ZDVVX൶FLHQWRQLWVRZQ

WRHVWDEOLVKVFLHQWHUEXWQRWLQJWKDWWKHFRQFHSWWKDW³DOOHJDWLRQVRIDFRPSDQ\¶VFRUH

RSHUDWLRQVFDQSURYLGHVXSSOHPHQWDOVXSSRUWIRUDOOHJDWLRQVRIVFLHQWHUHYHQLIWKH\

FDQQRWHVWDEOLVKVFLHQWHULQGHSHQGHQWO\´KDVVXSSRUWLQWKHFDVHODZ
 see also In re

Wachovia Equity Securities Litigation)6XSSG 6'1< ³[T]KH

&RXUWFRQVLGHUVµFRUHRSHUDWLRQV¶DOOHJDWLRQVWRFRQVWLWXWHVXSSOHPHQWDU\EXWQRW

LQGHSHQGHQWO\VX൶FLHQWPHDQVWRSOHDGVFLHQWHU´
 Freudenberg v. E*Trade Financial

Corp.)6XSSG 6'1< ¿QGLQJWKDWWKHSODLQWL൵VDGHTXDWHO\

SOHDGed VFLHQWHUZKHUHRQHRIPDQ\DOOHJDWLRQVZDVWKDWWKHPLVVWDWHPHQWVFRQFHUQHGWKH

GHIHQGDQWV¶FRUHRSHUDWLRQV 

                                             34


     Case 1:23-cv-10982-ER            Document 86           Filed 09/29/26       Page 35 of 39


        ๠LVOHDYHV3ODLQWL൵V¶DUJXPHQWWKDW³WHPSRUDOSUR[LPLW\VXSSRUWVVFLHQWHU´

EHFDXVH)DUIHWFKUHYHDOHGWKHH[LVWHQFHRI3URMHFW$WKHQDLQ'HFHPEHUZKLFKZDV

VRRQDIWHUWKH ,QGLYLGXDO'HIHQGDQWVPDGH VRPHRI WKH FKDOOHQJHGVWDWHPHQWV'RFDW

³>+@RZHYHUµFRXUWVLQWKLVGLVWULFWKDYHKHOGWKDWWHPSRUDOSUR[LPLW\DORQHGRHVQRW

UDLVHDFLUFXPVWDQWLDOLQIHUHQFHRIIUDXG¶´In re Supercom Inc. Securities Litigation, No.

15 Civ. 9650 (PGG), 2018 WL 4926442, at *32 (S.D.N.Y. Oct. 10, 2018) TXRWLQJ

Pearlstein v. BlackBerry Limited
)6XSS. 3d 233, 247 (S.D.N.Y. 2015)). (YHQZKHQ

FRQVLGHUHGWRJHWKHUQRQHRI3ODLQWL൵V¶DOOHJDWLRQVSURYLGHDVWURQJLQIHUHQFHRIVFLHQWHU
        c. ୡH0RUe Compelling Non-Culpable Inference
        ๠H,QGLYLGXDO'HIHQGDQWVFRQWHQGWKDW³WKHIDFWWKDW>WKH\@LQFUHDVHGWKHLUVKDUHV

IURPWRDQGUHWDLQHGWKHPWRWKHYHU\HQG´LVLQFRQVLVWHQWZLWKDQ\LQIHUHQFH

WKDWWKH\NQHZWKH&RPSDQ\ZDVLQVHYHUH¿QDQFLDOWURXEOH'RFDW๠H\

SURSRVHWKDWWKHPRUHUDWLRQDOLQIHUHQFHLVWKDWWKH\EHOLHYHGLQ)DUIHWFKDQGWKH

VWDWHPHQWVWKH\PDGHEXWXOWLPDWHO\WKH&RPSDQ\IDLOHG'RFDW–15. PlaLQWL൵V

VWDWHWKDWERWK-RUGDQDQG3KDLUVROGVKDUHVLQ$XJXVWZKLFKZDVDURXQGWKH¿UVW

FRUUHFWLYHGLVFORVXUHDQGWKDW1HYHV¶DFWLYLW\—PRYLQJVKDUHVWRDKROGLQJFRPSDQ\—

DOVRGRHVQRWUHÀHFWFRQ¿GHQFHLQ)DUIHWFK'RFDW–
3ODLQWL൵VDOVRUHDVVHUW

WKDWWKHH[LVWHQFHRI3URMHFW$WKHQDGHYHORSVDVWURQJLQIHUHQFHRIVFLHQWHUId. at 29–30.
        ๠URXJKRXWWKH&ODVV3HULRGHDFKRIWKH,QGLYLGXDO'HIHQGDQWVPDLQWDLQHG

RZQHUVKLSRYHUDVXEVWDQWLDOQXPEHURIVKDUHV 10 :KLOHVDOHVRIVWRFN³PDGHDVKRUWWLPH
                                                       9F


EHIRUHDQHJDWLYHSXEOLFDQQRXQFHPHQWDUH´VXVSHFWIn re Oxford Health Plans, Inc., 187

)5'
 6'1<


 RWKHUIDFWRUVDUHDOVRFRQVLGHUHGVXFKDV³WKHDPRXQW

RISUR¿WIURPWKHVDOHVWKHSRUWLRQRIVWRFNKROGLQJVVROGWKHFKDQJHLQYROXPHRILQVLGHU

VDOHVDQGWKHQXPEHURILQVLGHUVVHOOLQJ´In re Scholastic Corp. Securities Litigation,

252 F.3d 63, 74– G&LU  FLWLQJ Rothman v. Gregor, )G
 G&LU

10
  2Q'HFHPEHU 1HYHVRZQHG
VKDUHV'RF-2Q$XJXVW-RUGDQ
RZQHGVKDUHV'RF-2Q$XJXVW3KDLURZQHGVKDUHV'RF-19.

                                                  35


     Case 1:23-cv-10982-ER              Document 86           Filed 09/29/26           Page 36 of 39


2000)). ๠H,QGLYLGXDO'HIHQGDQWVVWDWHDQG3ODLQWL൵VGRQRWGLVSXWHWKDWWKH,QGLYLGXDO

'HIHQGDQWVLQFUHDVHGWKHLUVKDUHVIURPWR'RFDWZKLFKLVLQFRQVLVWHQW

ZLWKDQLQIHUHQFHRIIUDXGXOHQWLQWHQWsee In re Regeneron Pharmaceuticals, Inc.

Securities Litigation, No. 3 Civ. 3111 (RWS), 2005 WL 225288, at * 22 (S.D.N.Y. Feb. 1,

  ³,WLVZHOOVHWWOHGWKDWVXFKDQDFWLRQ—i.e., WKHSXUFKDVHRIDGGLWLRQDOFRPSDQ\

VKDUHVGXULQJWKH FODVV SHULRG—LV LQFRQVLVWHQW ZLWKDQLQWHQWWRFRPPLWIUDXG´  :KLOH

3ODLQWL൵VSRLQWRXWWKDW-RUGDQDQG3KDLUERWKVROGVKDUHVLQ$XJXVW'RFDW

WKHUHOHYDQWSHULRGLVWKH&ODVV3HULRGIURP'HFHPEHUWR'HFHPEHU

ˆ %RWK-RUGDQDQG3KDLULQFUHDVHGWRWDOVKDUHVIURPDQGDQGWKH$XJXVW

VDOHVZHUHQRWKXJHO\VLJQL¿FDQWLQFRPSDULVRQWRWKHLUWRWDOVKDUHV 11 See Ressler v. Liz
                                                                                 10F


Claiborne, Inc.)6XSSG ('1<

 Dৼ¶GVXEQRP)LVKEDXPY/L]

Claiborne, Inc.
)G G&LU


  ³,QIHUHQFHVRIVFLHQWHUFDQEHXQGHUPLned

ZKHQ[] LQVLGHUV¶ VDOHVRIVWRFNDUHR൵VHWE\HYHQODUJHUVWRFNDFTXLVLWLRQVGXULQJWKH

UHOHYDQWWLPHSHULRG´ 

         $VWKH,QGLYLGXDO'HIHQGDQWVDUJXHWKHPRUHFRPSHOOLQJLQIHUHQFHLVWKDWWKH\

³PDGHJRRGIDLWKDQGDFFXUDWHGLVFORVXUHVDERXWWKHPDQ\ULVNV)DUIHWFKIDFHGEXW

XOWLPDWHO\VXFFXPEHGWRDGRZQWXUQLQWKHOX[XU\IDVKLRQDQGH-FRPPHUFHLQGXVWU\LQ

ODWH´'RFDW๠HH[LVWHQFHRI3URMHFW$WKHQDGRHVQRWLPSO\WKDWWKH

,QGLYLGXDO'HIHQGDQWVNQHZ)DUIHWFKZDVJRLQJWRIDFHD¿QDQFLDOFULVLVDQG3ODLQWL൵V

DFFRUGLQJO\IDLOWRVX൶FLHQWO\DOOHJHVFLHQWHU
             3ODLQWLৼV+DYH1RW$GHTXDWHO\3OHaded Scheme Liability Under Rule 10b-
             5(a) and (c)
         ๠H,QGLYLGXDO'HIHQGDQWVDUJXHWKDW3ODLQWL൵V¶VFKHPHOLDELOLW\FODLPPXVWIDLO

EHFDXVH  WKH6$&GRHVQRWLQFOXGH a VHSDUDWHFRXQW IRUVFKHPHOLDELOLW\ (2) 3ODLQWL൵V

IDLOWRVX൶FLHQWO\SOHDGVFLHQWHU and (3) WKH6$&IDLOVWRDOOHJHGHFHSWLYHDFWVEH\RQG

11
  3ODLQWL൵VDOVRDUJXHWKDWVLQFH1HYHVPRYHGKLVVKDUHVLQWRDKROGLQJFRPSDQ\LWLPSOLHVWKDWKHGLGQRW
KDYH³FRQ¿GHQFHLQ)DUIHWFK¶VSURVSHFWV´EXWKHUHWDLQHGRZQHUVKLSRIRYHUPLOOLRQ&ODVV$VKDUHVDQG
&ODVV%VKDUHVRQ'HFHPEHU023. Doc. 81-22.

                                                    36


   Case 1:23-cv-10982-ER          Document 86         Filed 09/29/26      Page 37 of 39


WKHVXSSRVHGPLVVWDWHPHQWVDQGRPLVVLRQV 'RFDW3ODLQWL൵VFRQWHQGWKDWWKH\

SOHDGHGD³FRKHVLYHGHFHSWLYHFRXUVHRIFRQGXFW´E\DOOHJLQJ WKDWWKH,QGLYLGXDO

'HIHQGDQWVSXUVXHG3URMHFW$WKHQDZKLOHVLPXOWDQHRXVO\WHOOLQJWKHSXEOLFWKDWWKH\

GLGQ¶WQHHGWRSXUVXHVXFKDQLQLWLDWLYH. Doc. 83 at 30. ๠H\DOVRDUJXHWKDWWKH\

VX൶FLHQWO\DOOHJHGGHFHSWLYHFRQGXFWWKDWJRHVEH\RQGWKHPLVVWDWHPHQWVId. at 32. ๠H

,QGLYLGXDO'HIHQGDQWVFRXQWHUWKDW  WKH\QHYHUGHQLHGDQ\QHHGWRUDLVHFDSLWDODQG

(2) WKHDOOHJDWLRQIDLOVWRDOOHJHDQ\FRQGXFWGLVWLQFWIURPWKHPLVVWDWHPHQWVWKHPVHOYHV

Doc. 84 at 15.

       6FKHPHOLDELOLW\DULVHVZKHQGHIHQGDQWVHQJDJHLQGHFHSWLYHFRQGXFWLQ

FRQMXQFWLRQZLWKGHFHSWLYHVWDWHPHQWV See SEC v. CKB168 Holdings, Limited, 210 F.

6XSSG ('1< . 7RVWDWHDFODLPIRUVFKHPHOLDELOLW\DSODLQWL൵PXVW

SUHVHQWIDFWVVKRZLQJ ³WKDWWKHGHIHQGDQW (1) FRPPLWWHGDPDQLSXODWLYH RUGHFHSWLYH act,

(2) LQIXUWKHUDQFHRIWKHDOOHJHGVFKHPHWRGHIUDXG  [ZLWK] VFLHQWHUDQG 

UHOLDQFH´ Puddu v. 6D Global Technologies, Inc., No. 15 Civ. 8061 (AJN), 2021 WL


DW
 6'1<0DU DOWHUDWLRQLQRULJLQDO  TXRWLQJ SEC v. Lee, 720

)6XSSG 6'1< .

       ๠H6$&VWLOOIDLOVWRPHHWWKHSOHDGLQJUHTXLUHPHQW IRUVFKHPHOLDELOLW\. See In

re Teva Securities Litigation)6XSSG '&RQQ ³&RXUWVULJKWO\

LQVLVWWKDWDSODLQWL൵ZKRLQWHQGVWREULQJD5XOHE-5 claLPEDVHGRQERWKPLVVWDWHPHQW

DQGVFKHPHOLDELOLW\PXVWGR VRFOHDUO\DQGVSHFL¿FDOO\´W\SLFDOO\³LQWZRVHSDUDWH

FRXQWV.´  FLWLQJ In re Smith Barney Transfer Agent Litigation)6XSSG–

61 (S.D.N.Y. 2012)). ,QDQ\HYHQW3ODLQWL൵VIDLOWRVDWLVI\WKHIRXUHOHPHQWVUHTXLUHGWR

DOOHJHVFKHPHOLDELOLW\)LUVW3ODLQWL൵V¶WKHRU\RIPDWHULDOPLVUHSUHVHQWDWLRQVDQG

RPLVVLRQVUHOLHVRQWKHIDFWWKDWWKH\PDGHWKHVHVWDWHPHQWVZKLOHSXUVXLQJ3URMHFW

$WKHQDZKLFKDOOHJHGO\FRQWUDGLFWHGWKHVWDWHPHQWV'RFDW–23, EXW3ODLQWL൵VIDLO

to DOOHJHDGLVWLQctive act RIGHFHSWLRQRUPDQLSXODWLRQ³>&@RXUWVKDYHSURKLELWHG

SODLQWL൵VIURPUHFDVWLQJWKHLUSOHDGLQJVLQWKLVZD\´SEC v. Rio Tinto plc)WK

                                             37


   Case 1:23-cv-10982-ER           Document 86        Filed 09/29/26       Page 38 of 39


 G&LU  FLWLQJ In re Alstom SA)6XSSG 6'1< ).

Second, aVGLVFXVVHGDERYH3ODLQWL൵VKDYHQRWVX൶FLHQWO\SOHDGHGVFLHQWHUIRU WKH

,QGLYLGXDO 'HIHQGDQWV๠HUHIRUH3ODLQWL൵V¶VFKHPHOLDELOLW\FODLPVIDLODVWRWKDW

element. Menaldi v. Och-=Lৼ&DSLWDOManagement Group LLC)6XSSG

(S.D.N.Y. 2017) ³SFKHPHOLDELOLW\FODLPVDUHVXEMHFWWRWKH36/5$SOHDGLQJVWDQGDUG

ZLWKUHVSHFWWRVFLHQWHU´ 3ODLQWL൵VWKHUHIRUHKDYHIDLOHGWRDOOHJHWZRRIWKHHOHPHQWV

UHTXLUHGWRVXFFHVVIXOO\SOHDGD VFKHPHOLDELOLW\ claim.
          C. Section 20(a) Liability
       ๠H,QGLYLGXDO'HIHQGDQWVDUJXHWKDW³3ODLQWL൵V¶Section  D FODLPIDLOVEHFDXVH

WKH6$&GRHVQRWSODXVLEO\DOOHJHDSULPDU\YLRODWLRQRISection  E RUFXOSDEOH

SDUWLFLSDWLRQE\DQ\'HIHQGDQW´'RF80 DW3ODLQWL൵VDUJXH WKDWWKHLUFODLPSXUVXDQW

to Section  D VKRXOGQRWEHGLVPLVVHGEHFDXVHWKH\KDYHDGHTXDWHO\DOOHJHGSULPDU\

vLRODWLRQVRISection 10(b) DQGWKH,QGLYLGXDO'HIHQGDQWVGRQRWGLVSXWHWKHLUVWDWXVDV

³&RQWURO3HUVRQV´RYHU)DUIHWFK'RFDW

       ³7RDVVHUWDprima facie FDVHXQGHUSection  D DSODLQWL൵µPXVWVKRZDSULPDU\

YLRODWLRQE\WKHFRQWUROOHGSHUVRQDQGFRQWURORIWKHSULPDU\YLRODWRUE\WKHWDUJHWHG

GHIHQGDQWDQGVKRZWKDWWKHFRQWUROOLQJSHUVRQZDVLQVRPHPHDQLQJIXOVHQVHDFXOSDEOH

SDUWLFLSDQWLQWKHIUDXGSHUSHWUDWHGE\WKHFRQWUROOHGSHUVRQ¶´ Mechel OAO, 811 F.
6XSSGDW2 TXRWLQJ SEC v. First Jersey Securities, Inc., 101 F.3d 1450, 1472 (2d

&LU

  %HFDXVH3ODLQWL൵VKDYHIDLOHGWRDOOHJHDSULPDU\YLRODWLRQRIWKH([FKDQJH

$FWWKHLUFODLPSXUVXDQWWRSection  D LVGLVPLVVHG See 6WHDP¿WWHUV/RFDO


Pension Plan v. Skechers U.S.A., Inc.)6XSSG8 (S.D.N.Y. 2019), Dৼ’d

sub nom. Cavalier Fundamental Growth Fund v. Skechers U.S.A., Inc.)$SS¶[

G&LU 
          D. Leave to Amend
       3ODLQWL൵VDVN WKDW LIWKe &RXUW GLVPLVVHVWKHLUFODLPV WKDWLW JUDQW WKHPOHDYHWR

DPHQGWKHLU SOHDGLQJV Doc. 83 at 32 n.10. ๠H,QGLYLGXDO'HIHQGDQWVDUJXH WKDWWKH

                                              38


   Case 1:23-cv-10982-ER          Document 86        Filed 09/29/26      Page 39 of 39


6$&VKRXOGEHGLVPLVVHGZLWKSUHMXGLFHEHFDXVHLWLV3ODLQWL൵V¶WKLUGDWWHPSWWRSOHDGD

VHFXULWLHVIUDXGFODLPDIWHUWKHLQLWLDOFRPSODLQWDQGWKHFRQVROLGDWHGFRPSODLQW. Doc. 84

at 15. 0RWLRQVWRDPHQGDUHXOWLPDWHO\ZLWKLQWKHGLVFUHWLRQRIWKHGLVWULFWFRXUWMXGJH

Foman v. Davis, 371 U.S. 178, 182 (1962)³[A] GLVPLVVDO ZLWK SUHMXGLFH LVJHQHUDOO\

DSSURSULDWHZKHUH DFRXUW SXWVDSODLQWL൵RQQRWLFHRIDFRPSODLQW¶VGH¿FLHQFLHVDQGWKH

SODLQWL൵IDLOVWRFRUUHFWWKRVHGH¿FLHQFLHVDIWHUDPHQGPHQW´ Abu Dhabi Commercial

Bank v. Morgan Stanley & Co. Inc., No. 8 Civ. 7508 (SAS), 2009 WL 3346674, at *2

(S.D.N.Y. Oct. 15, 2009). ๠LV&RXUWLQLWVSULRURSLQLRQ, DOHUWHG3ODLQWL൵VWRWKH

GH¿FLHQFLHVLQLWVDOOHJDWLRQVRIVFLHQWHUZDUQHGWKDWWKHVWDWHPHQWVWRZKLFK3ODLQWL൵V

SRLQWZHUHIRUZDUG-ORRNLQJRSLQLRQVDQGPHUHSX൵HU\DQGFRXQVHOHGWKDWWKH\needed

WRSOHDGVFKHPHOLDELOLW\ZLWKPRUHVSHFL¿FLW\'RF'HVSLWHWKHDGGLWLRQRI

DOOHJDWLRQVDERXW3URMHFW$WKHQD3ODLQWL൵VKDYHIDLOHGWRUHPHG\WKHVHGH¿FLHQFLHV ๠H

6$&LVWKHUHIRUHGLVPLVVHGZLWKSUHMXGLFH
IV.      CONCLUSION
         )RUWKHIRUeJRLQJUHDVRQVWKHPRWLRQWRGLVPLVVLV GRANTED ZLWKSUHMXGLFH

๠H&OHUNRIWKH&RXUWLVUHVSHFWIXOO\GLUHFWHGWRWHUPLQDWHWKHPRWLRQ'RFV. 79 and 82,

DQGFORVHWKHFDVH.


,WLVSO ORDERED.


Dated:    6HSWHPEHU

          1HZ<RUN1HZ<RUN

                                                         EDGARDO RAMOS, U.S.D.J.


                                             39