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Judge Tosses Case For Failure To Prove Scienter

Law360 (April 4, 2007, 12:00 AM EDT) -- In a case with big implications for small companies, a judge has thrown out a suit filed against a small biopharmaceutical company, ruling that a company’s failure to meet its revenue projections does not mean that a fraud has occurred.

Judge George O’Toole of the U.S. District Court for the District of Massachusetts ruled that plaintiffs failed to prove that the underperformance of Praecis Pharmaceuticals’ stock was linked to material omissions or misrepresentations by the company.

“While history ultimately proved Praecis’ estimated ‘revenue opportunity’ to be...
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