978-1285770178 Case Printout Case CPC-07-06 Part 1

U.S.,2011.

Matrixx Initiatives, Inc. v. Siracusano

349B Securities Regulation

349BI Federal Regulation

349BI(C) Trading and Markets

349BI(C)7 Fraud and Manipulation

349Bk60.17 Manipulative, Deceptive or Fraudulent Conduct

349Bk60.18 k. In general. Most Cited Cases

To prevail on their claim that the defendant made material misrepresentations or omissions in violation of §

10(b) and Rule 10b–5, plaintiffs must prove: (1) a material misrepresentation or omission by the defendant; (2) sci–

enter; (3) a connection between the misrepresentation or omission and the purchase or sale of a security; (4) reliance

upon the misrepresentation or omission; (5) economic loss; and (6) loss causation. Securities Exchange Act of 1934,

349BI(C) Trading and Markets

349BI(C)7 Fraud and Manipulation

349Bk60.17 Manipulative, Deceptive or Fraudulent Conduct

349Bk60.27 Misrepresentation

349Bk60.27(1) k. In general. Most Cited Cases

349BI Federal Regulation

349BI(C) Trading and Markets

349BI(C)7 Fraud and Manipulation

349Bk60.17 Manipulative, Deceptive or Fraudulent Conduct

349Bk60.28 Nondisclosure; Insider Trading

[5] Securities Regulation 349B 60.28(13)

349B Securities Regulation

349BI Federal Regulation

170A Federal Civil Procedure

170AXI Dismissal

170AXI(B) Involuntary Dismissal

170AXI(B)3 Pleading, Defects In, in General

170Ak1772 k. Insufficiency in general. Most Cited Cases

To survive a motion to dismiss, plaintiffs need only allege enough facts to state a claim to relief that is plausible

on its face. Fed.Rules Civ.Proc.Rule 12(b)(6), 28 U.S.C.A.

[9] Securities Regulation 349B 60.45(1)

349Bk60.45(1) k. In general. Most Cited Cases

To establish liability under § 10(b) and Rule 10b–5, a private plaintiff must prove that the defendant acted with

“scienter,” which is a mental state embracing intent to deceive, manipulate, or defraud. Securities Exchange Act of

1934, § 10(b), 15 U.S.C.A. § 78j(b); 17 C.F.R. § 240.10b–5(b).

349Bk60.50 Pleading

349Bk60.51 In General

349Bk60.51(2) k. Scienter. Most Cited Cases

The pleading standard in the Private Securities Litigation Reform Act of 1995 (PSLRA), requiring a plaintiff in

a securities fraud action to state with particularity facts giving rise to a strong inference that the defendant acted with

349BI Federal Regulation

349BI(C) Trading and Markets

349BI(C)7 Fraud and Manipulation

349Bk60.50 Pleading

349Bk60.51 In General

1322 – 1323.

(c) Respondents have also adequately pleaded scienter, “ ‘a mental state embracing intent to deceive, manipu-

late, or defraud,’ ” Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 319, 127 S.Ct. 2499, 168 L.Ed.2d

179. This Court assumes, without deciding, that the scienter requirement may be satisfied by a showing of deliberate

recklessness. Under the Private Securities Litigation Reform Act of 1995, a complaint adequately pleads scienter

“only if a reasonable person would deem the inference of scienter cogent and at least as compelling as any opposing

inference one could draw from the facts alleged.” Id., at 324, 127 S.Ct. 2499. Matrixx’s proposed bright-line rule

requiring an allegation of statistical significance to establish a strong inference of scienter is once again flawed. The

complaint’s allegations, “taken collectively,” give rise to a “cogent and compelling” inference that Matrixx elected

not to disclose adverse event reports not because it believed they were meaningless but because it understood their

David C. Frederick, Washington, D.C., for Respondents.

Pratik A. Shah, for United States, as amicus curiae, by special leave of the Court, supporting the Respondents.

ville, NY, David C. Frederick, Counsel of Record, Scott H. Angstreich, Gregory G. Rapawy, Emily T.P. Rosen,

Kellogg, Huber, Hansen, Todd, Evans & Figel, P.L.L.C., Washington, D.C., for Respondents.

For U.S. Supreme Court Briefs, See:2010 WL 334501 (Pet.Brief)2010 WL 4477792 (Resp.Brief)2010 WL 5099373

(Reply.Brief)

adverse events. Respondents, plaintiffs in a securities fraud class action, allege that petitioners, Matrixx Initiatives,

Inc., and three of its executives (collectively Matrixx), failed to disclose reports of a possible link between its lead–

ing product, a cold remedy, and loss of smell, rendering statements made by Matrixx misleading. Matrixx contends

that respondents’ complaint does not adequately allege that Matrixx made a material representation or omission or

that it acted with scienter because the complaint does not allege that Matrixx knew of a statistically significant num-