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the SEC in connection with the attempted sale and offering of over $33 million in

EduTrades public offering stock. Plaintiffs further allege that Ehrhardt Keefe

participated in the drafting, preparation, and/or approval of the various public and

shareholder and investor reports and other communications. Because of its role,

plaintiff alleges that Ehrhardt Keefe had access to the adverse undisclosed information

about Whitney’s business prospects and financial condition and performance as

particularized herein and knew (or disregarded with severe recklessness) that these

adverse facts rendered the positive representations made by defendants materially

false and misleading. See CAC at ¶ 14-15.

Finally, plaintiff alleges that the Auditor Defendant, because of its position with

the Company, was able to and did control the content of the various SEC filings, press

releases and other public statements pertaining to the Company during the Class

Period. The Auditor Defendant was provided with copies of the documents alleged

herein to be materially false and misleading prior their issuance and/or had the ability

and/or opportunity to prevent their issuance or cause them to be corrected.

Accordingly, plaintiff alleges that the Auditor Defendant is responsible for the accuracy

of the public reports and releases and therefore primarily liable for the representations.

See CAC at ¶ 16.

C. The Press Releases and Plaintiff’s Theories of Fraud

As indicate above, plaintiff’s claims revolve around a broad array of alleged

misrepresentations that allegedly were “revealed” when the Company issued two press

releases, in November and December 2006, announcing the pendency of an

investigation by the Securities and Exchange Commission (the “SEC”) and receipt of a

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