John Ingram v. Vivus Inc

MEMORANDUM

The plaintiff appeals from a judgment of the district court granting the defen dants’ motion to dismiss his class action complaint, which asserts claims under the Securities Exchange Act of 1934. A complaint alleging securities fraud must comply with Federal Rules of Civil Procedure 8 and 9 and the pleading requirements of the Private Securities Litigation Reform Act, 15 U.S.C. § 78u-4(b). In the present case, the district court concluded* that the complaint did not satisfy these requirements because it did not adequately allege that the defendants made materially misleading statements or omissions and did not adequately state facts giving rise to a strong inference of scienter.

We agree with the district court that the complaint did not adequately allege that the defendants made materially misleading statements or omissions. The plaintiff does not allege that any of the defendants’ statements were literally false. Instead, he alleges that when the defendants made positive statements about the safety of Qnexa, VIVUS’s then-developmental weight-loss drug, they misled investors by failing to disclose information about certain side effects observed during the Qnexa…