Skadden Discusses Significant Ninth Circuit Ruling on Scienter in Securities Fraud

On June 10, 2020, the Ninth Circuit affirmed the dismissal of a putative securities fraud class action in a potentially significant decision for securities defendants, particularly those in the pharmaceutical, biotech and medical device space. The Ninth Circuit in Nguyen v. Endologix, Inc., No. 18-56322, 2020 WL 3069776 (9th Cir. June 10, 2020), held that the plaintiff’s theory that a medical device manufacturer misled investors about its product’s prospects for approval by the U.S. Food and Drug Administration (FDA) was too illogical to support the strong inference of scienter required to state a securities fraud claim. In doing so, the … Read more