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With this in mind, the Court will examine the statements of the confidential

witnesses. CW #1 is described as a “member of the Technical Support Team during

the Class Period . . . [who] had received some calls that should have been routed to

Customer Service, all of which were from customers who were unhappy with the

products.” The “most common complaint was that they were misinformed about a

contract” and had been “put under pressure” to sign a contract which was not

adequately explained. Moreover, customers complained about a monthly data charge.

CAC at ¶ 39.

These statements lack particularity. The statements from a tech-support

employee regarding “a few calls” expressing opinions on a product, intended for a

customer service representative, does not support an inference that the Company’s

entire business model is a sham. At best, it shows some people were unhappy with

Whitney’s products, but it is not indicative of a securities violation, much less an

indication of scienter.

CW #2 is described as a member of the “seminar sales team” during the Class

Period, who stated that “[i]n my estimation, about 90% of people will not make their

money back. You have to be responsible for your trades. It is really hard to make

money in the market without discipline . . . . [A]t least half of the class was a sales pitch

for more seminars and more products.” CAC at ¶ 41. Here too, this “statement” does

not support an inference that the Company violated the securities laws; rather, s/he is

offering his or her opinion on how to be successful in the stock market in general and on

the fundamental principle of a company up-selling its product. Indeed, CW #2 is not

alleging anything relating to a violation of securities laws.


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