In Re: Harman Int’l Indus.

Harman and three of its officers are alleged to have knowingly and recklessly propped up the Company’s stock price by making materially false and misleading statements about the Company’s financial condition and by failing to disclose related material adverse facts in violation of federal securities laws. At issue is whether the complaint stated a plausible claim of securities fraud with respect to three alleged statements that focus primarily on the status of the Company’s personal navigational device (“PND”) products. The court held that, although the challenge to the forward-looking nature of two statements was forfeited, the complaint plausibly alleges that those statements were not entitled to safe harbor protection because the accompanying cautionary statements were misleading insofar as they failed to account for historical facts about PNDs that would have been important to a reasonable investor. Further, the third statement, in the Company’s annual report, is plausibly understood, in the alleged circumstances, as a specific statement about its recent financial performance and not mere puffery. Accordingly, the court reversed the dismissal of the complaint and remanded for further proceedings. View "In Re: Harman Int'l Indus." on Justia Law