In re Vaxart, Inc. Securities Litigation

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

Case No. 20-cv-05949-VC

In re VAXART, INC. SECURITIES

LITIGATION.

ORDER DENYING MOTION FOR

CLASS CERTIFICATION

Re: Dkt. No. 311

In the typical securities fraud case, a plaintiff alleges that a company misled the investing public, causing the stock price to be artificially inflated until “the truth was revealed” after some bombshell announcement. This case is different. A company called Vaxart issued press releases with headlines designed to trick the public into believing that the company was on the verge of receiving a massive infusion of federal funding to produce a vaccine for COVID-19. These statements caused a “pop” in Vaxart’s stock price, allowing insiders to sell off their remaining shares at an inflated profit. But the press releases, in smaller print, also contained truthful statements—statements that one might call partial “corrective disclosures.” For example, they clarified that the company was selected merely to participate in a non-human primate study—not the major vaccine program everyone was fixated on. So the “truth” likely started seeping back into the market soon after the fraud was…