Special Situations Fund III QP, L.P. v. Marrone Bio Innovations, Inc.

MEMORANDUM AND ORDER

Plaintiffs in this consolidated class action charge Defendant Marrone Bio Innovations, Inc. (“Marrone Bio”); certain of its officers and directors; and its public auditor, Ernst & Young (“EY”), with violating federal securities laws. According to Plaintiffs, they were defrauded of millions of investment dollars based on the financial reporting fraud of Marrone Bio and Defendant Hector Absi, its Chief Operating Officer and head of sales. Plaintiffs reached a settlement with Marrone Bio and its officers and directors, and final judgment was entered as to that settlement on September 27, 2016. EY now moves to dismiss the claims against it pursuant to Federal Rule of Civil Procedure 12(b)(6). ECF No. 84. That motion is DENIED.

BACKGROUND

Marrone Bio is a biotech company that provides pest management and plant health products. After completing an initial public offering in August 2013, the company’s stock was traded on the NASDAQ under the ticker symbol “MBII.” At the end of 2013, Marrone Bio filed its 10-K, reporting that its revenues had doubled over the prior year. The company continued to report strong results in the first quarter of 2014, and in June…