Inter-Local Pension Fund GCC/IBT v. Ubiquiti Networks, Inc.

MEMORANDUM

In this class action brought by purchasers of stock of Defendant Ubiquiti Networks, Inc., Plaintiffs appeal the district court’s dismissal of their complaint alleging various violations of the federal securities laws against Ubiquiti and its officers. Reviewing de novo, Rubke v. Capitol Bancorp Ltd., 551 F.3d 1156, 1161 (9th Cir. 2009), we affirm in part, reverse in part, and remand for further proceedings.

1. The district court erred by dismissing Count I, which alleges a violation of Section 11 of the Securities Act of 1933, 15 U.S.C. § 77k. “To prevail in such an action, a plaintiff must prove (1) that the registration statement contained an omission or misrepresentation, and (2) that the omission or misrepresentation was material, that is, it would have misled a reasonable investor about the nature of his or her investment.” Rubke, 551 F.3d at 1161 (internal quotation marks omitted). Construing Plaintiffs’ allegations in the light most favorable to Plaintiffs, Daniels-Hall v. Nat’l Educ. Ass’n, 629 F.3d 992, 998 (9th Cir. 2010), the registration statement misrepresented the true extent of counterfeiting and the misrepresentation would have misled a reasonable…