“The assertions of former employees regarding Tandem’s sales forecasts and their knowledge of internal operations do not meet the necessary standard of particularity or reliability,” stated Judge Huff in her dismissal.
Forward-Looking Statements and Scienter
Moreover, the suit failed to convincingly argue that any statements made by Tandem’s executives were misleading. As the court noted, these were primarily forward-looking statements, opinions, or corporate puffery, which are generally not actionable under securities law. The allegations of scienter were also deemed insufficient, as merely wanting to avoid a stock price drop does not inherently imply wrongful intent.
Implications and Next Steps
As the lawsuit’s allegations of loss causation and control person liability were also dismissed, the plaintiffs are left with the option to amend their complaint in hopes of overcoming the significant legal hurdles outlined by the court. Representatives for Tandem and the plaintiffs have not yet commented on the ruling.
