Not a Lexis Advance subscriber? Try it out for free.

In re Infonet Servs. Corp. Secs. Litig.

United States District Court for the Central District of California

August 8, 2003, Decided ; August 12, 2003, Filed

Master File No. CV 01-10456 NM (Cwx)

Opinion

 [*1083]  ORDER GRANTING DEFENDANTS INFONET SERVICES CORP., JOSE A. CALLAZO, AKBAR H. FIRDOSY, ERIC DE JONG, MORGAN EKBERG, MASAO KOJIMA, JOSEPH NANCOZ, RAFAEL SAGRARlO, AND DOUGLAS CAMPBELL'S MOTION TO DISMISS

I. INTRODUCTION

On December 16, 1999, Infonet Services Corporation made an initial public offering ("IPO") of its Class B common stock. Since the IPO, Infonet's initial stock price of $ 21 has declined significantly. Plaintiffs allege that the drop in Infonet's stock price was caused by problems arising out of Infonet's management of AT&T Unisource Communications Services ("AUCS"). Plaintiffs assert that Defendants knew about these problems prior to the IPO, but fraudulently concealed this information both during and shortly after the IPO in an effort to inflate the price of Infonet's publicly traded stock. As a result, Plaintiffs brought the instant class action against Infonet, its [**4]  directors, the underwriters who were involved with Infonet's IPO, and various foreign telecommunications companies that owned shares of Infonet. The Plaintiff Class consists of all purchasers of the publicly-traded securities of Infonet from December 16, 1999, the day of Infonet's IPO, through August 7, 2001 (the "Class Period"). Compl. P 4. Plaintiffs assert that Defendants' conduct in connection with Infonet's IPO violated the Securities Act of 1933 (the "Securities Act") and the Securities Exchange Act of 1934 (the "Securities Exchange Act").

Plaintiffs assert four causes of action against Defendants Infonet Services Corporation ("Infonet") and Jose A. Collazo, Akbar H. Firdosy, Eric M. de Jong, Morgan Ekberg, Masao Kojima, Joseph Nancoz, Rafael Sagrario, and Douglas Campbell's (the "Individual Defendants") for: (1) violation of §§ 11 and 15 of the Securities Act; (2) violation of §§ 12(a)(2) and 15 of the Securities Act; (3) violation of § 10(b) of the Securities Exchange Act and Rule 10b-5 promulgated thereunder; and (4) violation of§ 20(a) of the Securities Exchange Act. Presently before the court is Defendants' motion to dismiss the Complaint pursuant toFed. R. Civ. P. 12(b)(6).

 [**5] II. FACTUAL BACKGROUND

Read The Full CaseNot a Lexis Advance subscriber? Try it out for free.

Full case includes Shepard's, Headnotes, Legal Analytics from Lex Machina, and more.

310 F. Supp. 2d 1080 *; 2003 U.S. Dist. LEXIS 14437 **

In re INFONET SERVICES CORPORATION SECURITIES LITIGATION

Subsequent History: Motion granted by In re Infonet Servs. Corp. Secs. Litig., 310 F. Supp. 2d 1106, 2003 U.S. Dist. LEXIS 14474 (C.D. Cal., Aug. 11, 2003)

Disposition:  [**1]  Defendants motion to dismiss granted. Plaintiffs leave to amend the Complaint granted.

CORE TERMS

Prospectus, multinational, transition, network, users, allegations, registration statement, Plaintiffs', misleading, forward-looking, customers, Defendants', caution, omission, stock, Securities Act, bespeaks, cautionary statement, misrepresentations, misstatements, investor, warned, motion to dismiss, Securities Exchange Act, particularity, analysts', scienter, underwriters, disclose, losses

Civil Procedure, Defenses, Demurrers & Objections, Motions to Dismiss, Failure to State Claim, Evidence, Judicial Notice, General Overview, Judicial Notice, Securities Law, Civil Liability Considerations, Securities Litigation Reform & Standards, Disclosures, Bespeaks Caution Doctrine, Civil Liability, Fraudulent Interstate Transactions, Governments, Legislation, Overbreadth, Pleadings, Heightened Pleading Requirements, Fraud Claims, Registration of Securities, False Registration Statements, Initial Offerings of Securities, Criminal Law & Procedure, Fraud, Securities Fraud, Elements, Criminal Offenses, Acts & Mental States, Contracts Law, Contract Formation, Blue Sky Laws, Offers & Sales, Business & Corporate Compliance, Sales of Goods, Title, Creditors & Good Faith Purchasers, Passing of Titles, Postoffering & Secondary Distributions, Recordkeeping & Reporting Requirements, Underwriting Agreements, Communications & Prospectuses, Business & Corporate Law, Management Duties & Liabilities, Causes of Action, Types of Securities, Investment Contracts, Joint Ventures & Partnerships, Securities Exchange Act of 1934 Actions, Implied Private Rights of Action, Deceptive & Manipulative Devices, Forward Looking Statements, Safe Harbor, Exemptions, Exempt Transactions, Safe Harbor Advertising, Scope of Provisions, Definitions