Crane
Police & Fire Retirement System v. Crane
Opinion
Lead Opinion
Chhabria, J.
ORDER DENYING MOTION TO DISMISS
I
In this securities fraud case, the plaintiff alleges that Epocrates, Inc. and its executives defrauded the investing public by failing to disclose that the company had systematically restructured contracts with its customers for the purpose of accelerating revenue recognition in Q1 2011, in response to a discovery that revenue for this quarter would otherwise be much lower than expected. Epocrates and its executives have moved to dismiss the third amended complaint. The motion is denied because the complaint alleges with enough particularity' that the defendants intended to deceive investors by favorably comparing the company’s Q1 2011 revenue numbers to its Q1 2010 revenue numbers, without disclosing a significant change (namely, the contract restructuring) that made the comparison misleading.
II
The third amended complaint contains the following allegations, which the Court *1078 must assume are true for purposes of this motion only.
During the pertinent period Epocrates offered an application (“app”) for smart phones and tablets to be used by doctors and other health professionals. The app helped health professionals treat patients by…