Foundry Networks (Nasdaq: FDRY) announced yesterday that the U.S. District Court for the Northern District of California has dismissed the Fifth Amended Complaint in the securities class action filed against it and certain of its directors and officers in January 2001. The dismissal is without leave to amend. A copy of Judge Maxine Chesney's Order dismissing the case is available here. Thank you to Shirli Fabbri Weiss of Gray Cary in San Diego, counsel for Foundry Networks, for providing Securities Litigation Watch with the Order.
Although plaintiffs alleged numerous new facts in the new Fourth and Fifth Amended Complaints (which were ruled on together in the Order), including alleged details about internal reports and complaints from Foundry sales personnel, the Court found that plaintiffs had, at most, alleged facts giving rise to a "reasonable inference" (rather than the required "strong inference") that defendants knew the challenged statements were false when made.
With respect to the one new alleged false statement included in the Fifth Amended Complaint--that Foundry management allegedly reiterated to Lehman Brothers that its business remained "on track"-- the Court found that such a statement was "too general, too vague, and too 'soft' to be considered material."