consideration of the complaint, the motion papers, the parties’ supplemental filings, and
oral arguments, the Court concludes that plaintiff has not sufficiently pleaded a claim for
violation of the securities laws. As will be explained, the allegations in the 175
paragraph and 67 page complaint do not meet the pleading standards to make out a
case for securities fraud.4 More particularly, the CAC fails to plead scienter as to any of
the defendants and fails to plead loss causation, i.e. plead a causal link between the
three theories of fraud and the press releases at issue. Accordingly, the motions are
GRANTED and this case is DISMISSED. The reasons follow.
This case is brought on behalf of purchasers of the common stock of Whitney
Information Network, Inc (“Whitney” or the “Company”) between August 11, 2005 and
December 15, 2006, inclusive (the “Class Period”). The governing complaint is the
Consolidated Amended Class Action Complaint for Violations of the Federal Security
Laws (“CAC”) (Dkt. # 96).
Plaintiff alleges that during the Class Period, defendants engaged in a course of
conduct to make a series of materially false and misleading statements and omissions
in the Company’s public filings and releases regarding the background of Company
4While the pleading standards in a securities fraud case are rigorous, the Court is mindful that this is a motion to dismiss, not a motion for summary judgment, and its ruling is based on the allegations in the complaint. The Court has been careful to evaluate the allegations in the complaint in terms of the pleading requirements, not what plaintiff would need to show to have the case go to trial. In other words, plaintiff does not have to make his case at this stage, but rather meet the strict pleading requirements to set forth an actionable claim for securities fraud.