Shapiro v. TG Therapeutics, Inc.Shapiro v. TG Therapeutics, Inc.
constituting fraud or mistake." Fed. R. Civ. P. 9(b). The Second
Circuit has interpreted Rule 9(b) to require that a complaint "(1)
specify the statements that the plaintiff contends were
fraudulent,
(2) identify the speaker, (3) state where and when the
statements were made, and (4) explain why the statements were
fraudulent." Rombach v. Chang,
There are six elements of a private claim brought under
Section l0(b). A plaintiff must prove: " ( 1) a material
misrepresentation
or omission by the defendant; ( 2) scienter; ( 3)
a connection between the misrepresentation
or omission and the
purchase or sale of a security; ( 4 ) reliance upon the
or omission; ( 5) economic loss; and ( 6) loss
misrepresentation
causation." Levitt v. J.P. Morgan Sec., Inc.,
A. Omissions
The First Amended Complaint alleges that defendants made statements that were materially false and misleading because those statements did not disclose the serious adverse events that arose in clinicctl trials of UKONIQ. Id. i 18.
6 defendants knowledge that UKNOIQ was unsafe, and the defendants were not reckless in touting UKONIQ's safety simply because those adverse events occurred. [3]
Put together, the facts alleged in the First Amended Complaint do not support a strong inference of scienter. Thus, the First Amended Complaint fails to state a claim for fraudulent misstatement.
C. Control Person Violations Mr. Shapiro also claims that the Individual Defendants violated Section 20(a) of the Exchange Act because they had control over TG Therapeutics when it allegedly violated Section l0(b) by making materially false omissions and misstatements. Since this allegation presupposes that TG Therapeutics violated Section l0(b) of the Exchange Act, and since the First Amended Complaint fails to state a claim for such a violation, Mr. Shapiro's Section 20(a) claim must also be dismissed.
III.Conclusion
For the foregoing reasons, the First Amended Complaint fails to state a claim on which relief can be granted. Thus, the Court know that the "hazard ratio" exhibited in clinical trials of UKONIQ exceeded [3] The First Amended Complaint does allege that the defendants did eventually 1.00, meaning that patients who received UKNONIQ were more likely to die than patients who were in the control arm of the clinical trials. FAC, � 124. However, the First Amended Complaint does not allege that the defendants knew of this hazard ratio at the time that they were making their allegedly wrongful statements concerning the safety of UKONIQ.
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