On August 23rd, the Ninth Circuit partially reinstated a Rule 10b-5 lawsuit filed by an investor in a closely held company against the company, its founders and its general counsel. The plaintiff alleged that the founders breached their duty to disclose the founders' stock sales made while the founders simultaneously asked the plaintiff to purchase more shares in the company. The Court held that the plaintiff adequately pled scienter and loss causation with respect to the founders. The Court, however, affirmed the dismissal of the remaining claims against the issuer and its counsel, and the claim for scheme liability. The founders' motivation cannot be attributed to the issuer when the alleged behavior is at odds with the issuer's interests. And a scheme liability claim cannot be based on the same facts as claims asserting misrepresentations or omissions. WPP Luxembourg Gamma Three Sarl v. Spot Runner, Inc.