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Romine v. Acxiom Corp.

United States Court of Appeals for the Eighth Circuit

December 12, 2001, Submitted ; July 15, 2002, Filed

No. 01-2096

Opinion

 [*703]  LOKEN, Circuit Judge.

On July 23, 1999, publicly held Acxiom Corporation and the Pritzker [**2]  Foundation, a substantial Acxiom shareholder, sold 5,421,000 shares of Acxiom common stock in a secondary public offering at $ 27 per share. Prior to the offering, Acxiom filed a Registration Statement/Prospectus (the "Prospectus") with the Securities and Exchange Commission, as required by the Securities Act of 1933. See 15 U.S.C. § 77e(a). A narrative portion of the Prospectus entitled "Recent Developments" reported favorable results for Acxiom's fiscal quarter that ended June 30, 1999, including earnings per share of $ 0.18, in line with analysts' expectations. These quarterly  [*704]  results were echoed in a press release issued by Acxiom three days before the offering. Acxiom's stock rose to $ 28 1/16 on July 23, assuring a successful sale. But on August 30, an article in Barron's financial magazine expressed concern about some of Acxiom's accounting practices and increasing competition. See Barry Henderson, "Day of Reckoning for Acxiom? Critics Call its Accounting Too Frisky," Barron's, August 30, 1999. The next day, the stock tumbled to $ 17 3/16 on large volume, eventually falling to $ 16 1/8 on September 9. 2

 [**3]  In April 2000, plaintiffs commenced this class action under § 11 of the Securities Act of 1933, 15 U.S.C. § 77k, alleging material misleading statements and omissions in the Prospectus. Defendants -- Acxiom and individuals who signed the Prospectus -- moved to dismiss the complaint under Rule 12(b)(6) of the Federal Rules of Civil Procedure for failure to state a claim. The district court 3 granted the motion, and plaintiffs appeal. ] We review a Rule 12(b)(6) dismissal de novo under a stringent standard. "As a practical matter, a dismissal under Rule 12(b)(6) is likely to be granted only in the unusual case in which a plaintiff includes allegations that show on the face of the complaint that there is some insuperable bar to relief." Fusco v. Xerox Corp., 676 F.2d 332, 334 (8th Cir. 1982) (citation omitted). We conclude this is such a case and therefore affirm.

 [**4]  ] Section 11 of the Securities Act of 1933 "allows purchasers of a registered security to sue certain enumerated parties in a registered offering when false or misleading information is included in a registration statement." Herman & MacLean v. Huddleston, 459 U.S. 375, 381, 74 L. Ed. 2d 548, 103 S. Ct. 683 (1983). Section 11 imposes a stringent standard of liability to ensure that registration statements are prepared in compliance with the disclosure provisions of the Act. "To establish a prima facie § 11 claim, a plaintiff need show only that he bought the security and that there was a material misstatement or omission." In re Nationsmart Corp. Sec. Litig., 130 F.3d 309, 315 (8th Cir. 1997), cert. denied, 524 U.S. 927, 141 L. Ed. 2d 696, 118 S. Ct. 2321 (1988). The issuer's liability is "virtually absolute, even for innocent misstatements." Herman & MacLean, 459 U.S. at 382.

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296 F.3d 701 *; 2002 U.S. App. LEXIS 14138 **

Larry R. Romine, on behalf of himself and all others similarly situated, et al., Plaintiffs - Appellants, v. Acxiom Corporation, et al., Defendants - Appellees.

Prior History:  [**1]  Appeal from the United States District Court for the Eastern District of Arkansas.

Disposition: Affirmed.

CORE TERMS

Prospectus, earnings, investor, per share, misleading, quarterly, employee benefits, misstatements, plaintiffs', analysts', pricing, stock, customer, offering, reserves, expectations, disclosure, principles, narrative, percent, district court, allegations, omissions, matter of law, registrant, allowance, inflated, Securities Act, misrepresentation, renegotiated

Civil Procedure, Defenses, Demurrers & Objections, Motions to Dismiss, Failure to State Claim, Securities Law, Registration of Securities, False Registration Statements, General Overview, Securities Act Actions, Civil Liability, Pleadings, Complaints, Requirements for Complaint, Pleading & Practice, Rule Application & Interpretation, Securities Exchange Act of 1934 Actions, Implied Private Rights of Action, Deceptive & Manipulative Devices, Recordkeeping & Reporting Requirements, Issuers of Securities, Forms, Criminal Law & Procedure, Fraud, Securities Fraud, Elements, Initial Offerings of Securities, Prospectuses