Williams v. FVC.Com Inc.

MEMORANDUM *

Plaintiffs appeal the dismissal of their complaint for failure to state a claim of securities fraud in violation of §§ 10(b) and *340 20(a) of the Securities Exchange Act, 15 U.S.C. §§ 78j(b) and 78t(a), and Rule 10b-5 of the Securities Exchange Commission, 17 C.F.R. § 240 .10b-5. The plaintiffs are a class of shareholders of FVC.COM Inc. (“FVC”), a corporation that provided broadband network video applications. The defendants are FVC, the chairman of its board, and several of FVC’s principal officers. The district court dismissed the plaintiffs’ consolidated complaint, without leave to amend, for failure to meet the heightened pleading requirements of the Private Securities Litigation Reform Act (“PSLRA”), 15 U.S.C. § 78u-4. We affirm.

The precipitating event for this action was FVC’s revision of its unaudited report for the fourth quarter of 1998 (“4Q98”), after its January 1999 announcements of 4Q98 revenues resulting in a profit of $1.2 million. The revision came in April 1999 and was substantial; it provided for a loss of $6 million instead of a profit of $1.2 million.

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