Tuesday, June 06, 2006

Too Many Gaps

It seems the “fundamental problem with Plaintiffs' allegations” in the Gilead securities class action is “that they require the Court to make the unreasonable inference that a public revelation on August 8 caused a price drop three months later on October 28.” In other words, as Judge Martin J. Jenkins (N.D. Cal.) continued, “there are too many logical and factual gaps in Plaintiffs' allegations to support the conclusion that Defendants' alleged misconduct proximately caused Gilead's stock decrease in October.”

So, since “there was no price drop immediately after the August 8 revelation,” and “Plaintiffs have failed to remedy the deficiencies of their allegations in each amended version, the Court finds that further amendment is futile. Accordingly, the Court dismisses the Complaint with prejudice.”

You can read In re Gilead, issued May 12, 2006, at 2006 U.S. Dist. LEXIS 32893.

Nugget: “Indeed, the evidence Plaintiffs have presented to the Court only supports an inference that the market gave little or no weight to the FDA Warning Letter.”

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