Boy, the Ninth Circuit sure is making it easy for the Nugget to explain their decision to tank the Juniper Networks securities class action. Usually, the decisions have to be pared down, but this one, clocking in at just a single page (sans the few citations and boilerplate intro), can be fully reproduced for your reading pleasure. Here it is:
“Plaintiffs allege that defendants knew at the time they announced the forecast for the second quarter of 2001 ("2Q01") that the forecast was unrealistically optimistic, and that defendants knew there was no way Juniper would be able to achieve its predictions. However, the FAC [First Amended Complaint] does not plead specific facts establishing that the forecast was false when made. In fact, the FAC acknowledges that Juniper lowered its annual forecast for 2001 on the same day it announced the 2Q01 forecast.”
“Furthermore, the FAC fails to allege specific facts that give rise to a ‘strong inference’ of scienter. The FAC alleges that Juniper experienced a slowdown. However, allegations that defendants ‘could regularly track’ sales data contradicting the 2Q01 forecast, accompanied by ‘a general assertion about what [plaintiffs] think the data showed,’ is insufficient to plead scienter without ‘hard numbers or other specific information.’”
“Similarly, plaintiffs fail to establish that defendants' alleged stock sales give rise to a strong inference of scienter. While unusual or suspicious stock sales by corporate insiders may constitute circumstantial evidence of scienter, the FAC fails to allege either that the stock sold by defendants Kriens, Haley, and Wexler constituted a significant percentage of their holdings or that such sales were inconsistent with their prior trading histories.”
You just read In re Juniper Networks, issued December 16, 2005. If you still want the actual thing though, go to 2005 U.S. App. LEXIS 28253.
Nugget: “This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as provided by 9th Cir. R. 36-3.”