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rules violation. Plaintiff does not allege a single document that the Auditor Defendant

was aware of which showed that its opinion was in error. Plaintiff has not identified any

fact that would lead the Auditor Defendant to be aware that the statements in the CAC

were false. There are no allegations of “red flags” that the Auditor Defendant should

have picked up on. Plaintiff alleges nothing more than conclusory allegations that the

Auditor Defendant should have known about the fraud, with no details as to how, why

and when it should have known. This is insufficient under Rule 9(b). See Garfield v.

NDC Health Corp., 466 F.3d 1255, 1262 (11th Cir. 2006) (affirming dismissal of

securities fraud claims against the company’s auditor for failing to plead the “who, what,

when, where, and how”).

Second, the CAC fails to allege any facts which show scienter. The SAC alleges

no facts as to the Auditor Defendant’s state of mind. Statements that it acted recklessly

are not sufficient. Statements as to other defendants’ state of mind do not transfer to

the Auditor Defendant. As noted above, plaintiff has not even alleged that the Auditor

Defendant violated any GAAP or other accounting standards.

The Auditor Defendant also argues that the CAC fails to establish loss causation

because the press releases are not linked to any of the three theories of fraud. For the

reasons stated above with respect to the Whitney Defendants’ motion, the Court agrees

that the CAC fails to plead loss causation. As to the Auditor Defendant, it is clear that

the press releases cannot be interpreted to “correct” any materially false or misleading

information which could possibly be attributed to any statement alleged to have been

made by the Auditor Defendant as there are no allegations that it made any specific

misstatements or omissions. There are no allegations as to how the announcement of


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