United States Fourth Circuit

District court correctly dismissed securities class action against public company's accountants where Plaintiffs failed to allege facts showing the accountants' scienter. The allegations showed that company went to considerable lengths to conceal its fraud from the accountants, and the stronger and more plausible inference to be drawn from the facts alleged in the complaint is that the accountants did not know that the company was defrauding its investors, and therefore lacked scienter.

Appellate Information

• Argued 10/28/2008
• Decided 01/05/2009
• Published 01/05/2009

Judges

• Before WILKINSON and AGEE, Circuit Judges, and JOHN T. COPENHAVER, JR., United States District Judge for the Southern District of West Virginia, sitting by designation.

Court

• United States Fourth Circuit

Counsel

• For Appellees:
  
• ARGUED:  Andrew John Entwistle, Entwistle & Cappucci, L.L.P., New York, New York, for Appellants.  Daniel F. Kolb, Davis, Polk & Wardwell, New York, New York;  John T. Behrendt, Gibson, Dunn & Crutcher, L.L.P., New York, New York, for Appellees.   ON BRIEF:  Johnston deF. Whitman, Jr., Richard W. Gonnello, Jordan A. Cortez, Entwistle & Cappucci, L.L.P., New York, New York;  Adelberg, Rudow, Dorf & Hendler, L.L.C., Baltimore, Maryland, for Appellants.  Marshall R. King, Lee G. Dunst, LaShann M. DeArcy, Gibson, Dunn & Crutcher, L.L.P., New York, New York, Daniel F. Goldstein, Brown, Goldstein & Levy, L.L.P., Baltimore, Maryland, for Appellee Deloitte & Touche Accountants;  Sharon Katz, Jane Alexandra Small, Joshua D. Liston, Davis, Polk & Wardwell, New York, New York, Max H. Lauten, Kramon & Graham, P.A., Baltimore, Maryland, for Appellee Deloitte & Touche LLP.