6th Circ. Dumps Zoo Entertainment Shareholder Class Action

Law360, Los Angeles (August 27, 2013, 4:13 PM EDT) -- The Sixth Circuit dismissed a shareholder securities class action accusing Zoo Entertainment Inc. of publishing false financial statements that caused its stock to drop 34.3 percent, ruling Tuesday that it didn't support a strong inference that Zoo acted with scienter.

Affirming an Ohio federal court's decision, the three-judge panel found that shareholder Bruce E. Ricker failed to allege multiple, obvious red flags usually required to support claims of recklessness.

Ricker claimed an accountant for the video game software developer warned its chief executives that a major...
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