Police Retirement Sys. v. Intuitive Surgical

July 17, 2014 by Justia

PRS filed a class action against Intuitive on behalf of purchasers of Intuitive common stock, alleging violations of sections 10(b) and 20(a) of the Securities and Exchange Act of 1934 and Securities and Exchange Commission Rule 10b.5, 15 U.S.C. 78j(b), 78t(a), 17 C.F.R. 240.10b-5. PRS alleged that Intuitive, through its executives, knowingly issued false and misleading statements regarding the company's growth and financial health which caused artificial inflation of the share price. The court concluded that, read as a whole, PRS's allegations did not satisfy the heightened pleading requirements imposed in the securities fraud cases and did not identify any material misstatements made with scienter. Intuitive's statements were mostly forward-looking statements or garden variety corporate optimism, and PRS failed to suggest that the executives made false statements with knowing or reckless disregard for Intuitive's economic circumstances. Accordingly, the court affirmed the district court's dismissal of the complaint with prejudice. View "Police Retirement Sys. v. Intuitive Surgical" on Justia Law