Quick takes on some recent securities litigation decisions:

1. In re: PerkinElmer, Inc. Securities Litigation (D. Mass. September 30, 2003)--Motion to Dismiss Denied by Judge O'Toole

Lots of great fodder for plaintiffs' counsel in this case.

Here, plaintiffs alleged that defendants' statements spotlighting the successes of their "Optoelectronics unit" and new x-ray panels were fraudulent because they failed to disclose that the x-ray panels were often defective, and further because the company's reported revenues improperly included income from sales of the defective panels, even though many of those sales were later reversed as the result of returns.

The Court found that the plaintiffs had sufficiently alleged that the statements could be material despite the "mere fact" that the x-ray panels only accounted for a small portion of PerkinElmer's net profits in the second and third quarters of 2001. The Court stated that materiality requires an assessment of qualitative and quantitative factors, so that even quantitatively small amounts can still present a materially misleading picture of a company's health. The Court added that "this is particularly true here where it is alleged that the company chose to feature the x-ray panels in several of its press releases during the relevant period."

In addition, the Court found that an inference of scienter was also supported by the allegation that two individual defendants both sold substantial blocks of stock during the class period. Although the defendants "sought to introduce additional facts" to diminish this inference by showing that these stock sales were part of a consistent and regular pattern of stock sales by the two, the Court stated that "these factual issues, however, cannot be resolved on a motion to dismiss and must be left for resolution at trial, or if appropriate, on a motion for summary judgment."

2. Abbad v. Amman (S.D.N.Y Sept. 30, 2003) [Global TeleSystems, Inc. litigation]--Motion to Dismiss Granted by Judge Preska

Judge Preska: "The instant case fits squarely into the legion of cases wherein investor plaintiffs, disappointed in the outcome of their investment, conclude that somewhere, sometime in the past, a plan was hatched without their knowledge and that subsequent events and statements were all fraudulent attempts to keep the plaintiffs from uncovering the secret plan."

3. Barrie v. Intervoice-Brite (N.D. Texas, Dallas Division, Sept. 15, 2003)--Motion to Dismiss Granted by Judge Kinkeade

Here, the complaint alleged that 21 different statements violated § 10(b). The Court found that each failed to state a claim, as follows:

11 statements made by analysts--No "entanglement" because plaintiffs "do not make the necessary connection between a specific statement made by a control person of the defendant and the subsequent publishing of that statement by the third party analyst."

5 statements "from conference calls, press releases, or other communications from multiple parties"--not actionable because plaintiffs fail to identify the individual who made the statement.

5 remaining statements--not actionable because while plaintiffs identify the speaker, they fail to specifically plead why the statements were false when made.