New Mexico State Investment Co, et al v. Ernst & Young LLP, et al, No. 09-55632 (9th Cir. 2011)
Annotate this CasePlaintiff appealed the district court's grant of defendant's, Ernst & Young, LLP, motion to dismiss for claims stemming from a securities class action complaint against Broadcom Corporation for a fraudulent $2.2 billion stock options backdating scheme. At issue was whether the complaint adequately plead scienter where any of the allegations alone were sufficient to create a strong inference of scienter or, in the alternate, where a holistic view of the same allegations combine to create a strong inference of intentional conduct or deliberate recklessness. The court held that the complaint adequately plead scienter where the complaint was loaded with specific allegations of how and why defendant should have investigated deficient or missing documentation and where there was no doubt that the allegations, considering the totality of the circumstances, presented at least as strong an inference of scienter as any competing innocent inference.
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