Matthew Roberts v. Foxhollow Technologies, Inc.

MEMORANDUM

Matthew Roberts’ (“Roberts”) putative securities fraud class action against Fox-Hollow Technologies, Inc. (“FoxHollow”) alleges various misrepresentations relating to FoxHollow’s personnel philosophy and plans. Roberts alleges that he purchased FoxHollow stock in reliance on those statements and suffered losses when the dismissal of senior executives revealed that they were false. Because the district court dismissed the Complaint for failure to state a claim, we construe all factual allegations in the light most favorable to Roberts. Metzler Inv. GMBH v. Corinthian Colleges, Inc., 540 F.3d 1049, 1061 (9th Cir.2008).

The required elements of a private securities fraud action under Rule 10b-5 are: (1) a material misrepresentation or omission of fact, (2) scienter, (3) a purchase or sale of securities in reliance, (4) loss causation, and (5) economic loss. Metzler, 540 F.3d at 1061 . In securities fraud actions alleging misleading statements or omissions, the plaintiff must plead falsity with particularity. 15 U.S.C. § 78u-4(b)(l) & (2). Although falsity and materiality are mixed questions of law and fact, Fecht v. Price Co., 70 F.3d 1078, 1081 (9th Cir.1995), their…