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Summary:
On June 28, 2004, the United States Supreme Court granted certiorari in the case Dura Pharmaceuticals, Inc. v. Broudo, appealed from the United States Court of Appeals for the Ninth Circuit. The case concerns allegedly false statements made by Dura to its shareholders concerning development and marketing of two of its products: an asthma inhaler and asthma antibiotic. Plaintiffs charge that the company knowingly defrauded investors by making overly optimistic statements about product approval and company earnings. The district court held that plaintiffs had not satisfied the requirements for bringing an antifraud case under section 10(b) of the Securities Exchange Act of 1934. The court of appeals stated that the district court erred in applying the federal law for pleading a securities fraud case and reversed and remanded the judgment of the district court. The United States Supreme Court heard oral argument on January 12, 2005. On June 28, 2004,, the United States Supreme Court granted certiorari in the case Dura Pharmaceuticals, Inc. v. Broudo,1 appealed from the United States Court of Appeals for the Ninth Circuit.2 Defendant Dura Pharmaceuticals is a publicly traded company which develops and markets prescription pharmaceuticals for treating allergies and asthma. Plaintiffs are investors who purchased Dura stock between April 15, 1997, and February 24, 1998. During this period Dura made statements about two products which it developed and sold: 1. Albuterol Spiros, a mechanical inhaler administering asthma medication and 2. Ceclor CD, an asthma antibiotic. Despite experiencing problems with the development of the inhaler and despite experiencing declines in sales of Ceclor, Dura released a number of optimistic public statements. During the period in question, Dura's stock reached a high of $53 per share. On February 24, 1998, Dura stated that it expected lower
