Tuesday, April 25, 2006

Block Quotes Don't Cut It

Judge Jeffrey S. White (N.D. Cal.), who upheld Plaintiffs’ 1933 Act claims, but dismissed the 1934 Exchange Act claims, has a few words of advice for Plaintiffs should they choose to amend their complaint again in the Intrabiotics securities class action. You see, because the complaint contains “large block quotes,” and “Plaintiffs engage in a pattern of quoting long excerpts from documents which contain multiple statements,” Judge White said that Plaintiffs, who “are responsible for identifying with particularity what statements are false and misleading,” “have not fulfilled their responsibility in this regard.” So, next time around, they “should clearly identify which specific statements within the documents or block quotes they contend are false or misleading.”

Of possible interest: Intrabiotics, with $15 million in D&O insurance, and about $50 million in cash, has not generated a single penny of revenue since its inception in 1994. Not even one.

You can read In re Intrabiotics, issued January 23, 2006, at 2006 U.S. Dist. LEXIS 15753.

Nugget: “If the DSMB, and then Defendants, were able to determine before the trial was completed that iseganan was not achieving its goals and was unsafe, then it is possible that the DSMB and Defendants had such information even sooner than the decision to terminate the trial was announced. The problem with Plaintiffs' Complaint is that it provides no basis for determining, or even inferring, when, Defendants may have had such information.”

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