X hits on this document





31 / 47

CW #3 is described as “a member of the Company’s technical support team

during the Purported Class Period,” and offers an opinion that the “EduTrades proposed

IPO never occurred” because “information in the SEC registration was not ‘matching

up.’” CAC at ¶ 137. This statement lacks particularly. There are no facts alleged to

show that this member of the technical support team – who is not a part of the

Company’s executive, legal or accounting department – would have any firsthand

knowledge of the EduTrades IPO. Moreover, the allegation that numbers were not

“matching up” is the type of vague pleading rejected under the PSLRA.

CW #4 (labeled CW#5) is described as having “trained at the corporate office

and . . . worked as a sales representative from July 2006 through January 2007, [and]

learned on the road that the objective was to close the sales.” “You sit down and you

watch other sales people go through it with customers. It’s a high pressure sales

environment. CAC at ¶ 42. These allegations do not sound in fraud, as any sales

company would encourage its employees to close sales. Also, the fact that this person

was “on the road,” fails to give rise to any inference that the individual defendants, who

were executives in the corporate offices, participated in any alleged fraud.

Overall, the statements of the four confidential witnesses fail to provide the

factual narrative required to plead scienter. Their statements simply do not relate to

securities fraud and are insufficient to avoid dismissal of the CAC.

Plaintiff also points to the Paisola E-Mail and the fact that the Company did not

disclose his OSHA complaint as indicative of scienter. As discussed above, neither the

email or the OSHA complaint is evidence of scienter.

4. The Individual Defendants and Scienter


Document info
Document views160
Page views160
Page last viewedWed Jan 18 16:15:32 UTC 2017