U.S. Court of Appeals for the Ninth Circuit Affirms Decision Dismissing a Putative Class Action Alleging Violations of the Federal Securities Laws

Jay S. Auslander and Aari Itzkowitz

April 15, 2021

We are pleased to announce that the U.S. Court of Appeals for the Ninth Circuit affirmed the decision of the U.S. District Court for the Central District of California’s dismissing a putative class action alleging violations of the federal securities laws. In its complaint, the plaintiff alleged that our clients violated Section 10(b) of the Securities and Exchange Act of 1934 when they published an equity research report concerning MannKind Corporation and then served as placement agent for a transaction on behalf of the company that was announced later that same day.  The plaintiff further alleged that the defendants’ failure to disclose the transaction in the research report violated Section 10(b) of the Exchange Act.  The District Court twice dismissed the complaint, holding that the plaintiff failed to plausibly allege that the defendants acted with fraudulent intent.  After briefing and oral argument held on February 2, 2021, the Ninth Circuit agreed, affirming the District Court’s dismissal of the complaint.  In doing so, the Ninth Circuit held that “because the complaint does not offer a plausible motive for the bank’s actions or provide compelling and particularized allegations about scienter, it does not support a strong inference that the defendant intentionally made false or misleading statements or acted with deliberate recklessness.”  Our litigation team in the District Court proceedings and on the Ninth Circuit appeal was led by Jay Auslander and Aari Itzkowitz.   The appeal is captioned, Panthera Investment Fund v. H.C. Wainwright et al., case number 20-2500.   Summaries of the decision as reported on Westlaw by Thomson Reuters and on Law360 can be found here and here.