Wednesday, May 03, 2006

Merry-Go-Round Stops

If you read yesterday’s article, you already know that getting leave to amend isn’t necessarily going to help you. But today it does. Just look at the Checkpoint securities class action, which Judge Richard M. Berman (S.D.N.Y.) dismissed in March 2005, with leave to amend of course.

Looks like this time Plaintiffs got it right, as Judge Berman said that the new allegations “cure the scienter deficiencies relating to revenue projections” “to the effect that the Individual Defendants knew of material differences between their public statements and Check Point's financial performance. Among other things, Plaintiffs allege that Defendants had access to specific information of sales results, sales projections, and updates with various departments that sales were declining due to increased competition and that problems with NG, Check Point's most important product, were well understood.”

Also, “Plaintiffs adequately alleges loss causation” under Dura because they “allege that competitive pressure and problems with NG caused Check Point's revenue shortfall which caused Check Point's share price to decline when the Company announced its 1Q02 revenue.”

You can read In re Check Point Software Technologies, issued April 26, 2006, at 2006 U.S. Dist. LEXIS 24317.

Nugget: “The Court has previously determined that the timing and the amount of information that Check Point disclosed is a question of fact.”

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