IN RE: PERION NETWORK LTD. SECURITIES LITIGATION, 1:24-cv-02860

Plaintiffs, representing a class of investors, sued Perion Network Ltd. and certain executives, alleging securities fraud under the Exchange Act and Israeli law, based on public statements made from February 2021 to June 2024.
Perion is a digital advertising company heavily reliant on search advertising, with a major revenue source through its contractual partnership with Microsoft Bing.
Plaintiffs claimed Perion misrepresented the quality of its search advertising traffic, asserting that much of it came from low-quality publishers despite public claims of “impeccable quality standards.”
Key statements at issue included press releases in 2022 characterizing Perion’s standards as “impeccable.” Plaintiffs alleged these were false in light of internal practices and reporting, citing confidential witness accounts and news articles.
After negative financial news and the exclusion of certain publishers from Bing, Perion’s share price dropped significantly. Plaintiffs argued these events revealed the truth and led to investor losses.
Defendants moved to dismiss for failure to state a claim, arguing that the alleged misstatements weren’t actionable and that scienter was not adequately pled.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Actionability of Quality Statements	Perion falsely described its search traffic quality as “impeccable.”	Statements were mere puffery or opinion, not actionable misrepresentations.	Mostly agreed with defendant; only two 2022 statements potentially actionable, but only barely.
Omission Liability (Failure to Disclose Publisher Quality)	Omission of low-quality traffic details was misleading to investors.	No duty to disclose all details; statements about volume/revenue did not require disclosure of publisher quality.	Agreed with defendants; no actionable omissions on this basis.
Scienter	Defendants knowingly misled investors or were reckless in public statements.	Plaintiffs failed to allege specific facts showing knowledge or reckless disregard; alleged facts too vague.	Agreed with defendants; scienter inadequately pled.
Section 20(a) Control Person Liability	Control persons liable for primary violations by Perion.	No primary violation, so no control person liability.	Dismissed; no adequately pled primary violation.

Ashcroft v. Iqbal, 556 U.S. 662 (pleading standard for plausibility)
Bell Atl. Corp. v. Twombly, 550 U.S. 544 (pleading requirement for facial plausibility)
Stoneridge Inv. Partners, LLC v. Sci.-Atlanta, Inc., 552 U.S. 148 (elements of Rule 10b-5 claim)
Basic Inc. v. Levinson, 485 U.S. 224 (standard for materiality and omissions in securities law)
Novak v. Kasaks, 216 F.3d 300 (scienter pleading requirements; insider trading motives)
Rombach v. Chang, 355 F.3d 164 (heightened pleading requirements for fraud)
ATSI Commc’ns, Inc. v. Shaar Fund, Ltd., 493 F.3d 87 (pleading primary and control person liability)