Case 1:12-cv-00033-JRN Document 12 Filed 02/29/12 Page 1 of 32
Case 1:12-cv-00033-JRN Document 12 Filed 02/29/12 Page 1 of 32
Case 1:12-cv-00033-JRN Document 12 Filed 02/29/12 Page 1 of 32
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<strong>Case</strong> 1:<strong>12</strong>-<strong>cv</strong>-<strong>00033</strong>-<strong>JRN</strong> <strong>Document</strong> <strong>12</strong> <strong>Filed</strong> <strong>02</strong>/<strong>29</strong>/<strong>12</strong> <strong>Page</strong> 2 <strong>of</strong> <strong>32</strong>TABLE OF CONTENTSI. PRELIMINARY STATEMENT ......................................................................................... 1II. BACKGROUND ................................................................................................................. 2III. STANDARDS ON A MOTION TO DISMISS .................................................................. .4IV. ARGUMENTS AND AUTHORITIES ................................................................................ 5A. Plaintiff Failed to Adequately Plead a Section 10(b) Claim based uponAlleged Short Life Expectancies ............................................................................... 51. Plaintiff Failed to Adequately Plead Motive ................................................. 62. Plaintiff Failed to Adequately Plead Conscious Behavior and Failed toAdequately Plead Material Misstatements or Omissions .............................. 8a. Neither Dr. Cassidy's Methodology nor Peden's Alleged IncorrectDescriptions there<strong>of</strong> Impose Liability on Defendants ............................. 8b. Defendants did not Know that Dr. Cassidy's LEs were MateriallyShort ......................................................................................................... 9c. Plaintiffs Allegation that LPHI Artificially Inflated its RevenuesDefies Common Sense ........................................................................... 13d. The Contingency Discussed in the Risk Disclosures had notOccurred ................................................................................................. 14e. Plaintiff Failed to Adequately Allege Misrepresentations by Pardo ..... 17B. Plaintiff Failed to Adequately Plead a Section 10(b) Claim forAccounting Fraud ..................................................................................................... 181. Plaintiff Failed to Plead Scienter with Respect to RevenueRecognition .................................................................................................. 182. Plaintiff Failed to Plead Scienter with Respect to Impairment .................... 20C. Plaintiff Failed to Adequately Plead an Insider Trading Claim against Peden ........ 22D. Plaintiff Failed to Adequately Plead a Section 17(a) Claim ................................... .23E. Plaintiff Failed to Adequately Plead Section 13 Claims and Claims for Violations<strong>of</strong> Various Exchange Act Rules ............................................................................... 24IV. CONCLUSION ........................................................................................................ 26-1-
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