John Loos v. Immersion Corporation

Plaintiff John Loos appeals the district court’s dismissal of his securities fraud class action for failure to state a claim. Plaintiff argues that the district court erred by analyzing his allegations of scien-ter in isolation rather than “collectively” as mandated by Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308 , 127 S.Ct. 2499 , 168 L.Ed.2d 179 (2007). Plaintiff further challenges the district court’s conclusion that he failed to establish loss causation by alleging a precipitous decline in Immersion Corp.’s stock price on the heels of a July 1, 2009 press release announcing an internal investigation into the company’s revenue accounting practices.

We hold that the announcement of an investigation, standing alone, is insufficient to establish loss causation. We further conclude that Plaintiff cannot establish loss causation on the facts alleged in the amended complaint because he has not attempted to correlate his losses to anything other than the announcement of an internal investigation. We therefore affirm the district court on this loss causation issue. We do not reach Plaintiffs arguments regarding scienter.

I.

Immersion Corporation (“Immersion”)…