On July 28th, the Eastern District Court for Wisconsin held that the Koss Corporation could be liable under Rule 10b-5 for securities fraud after its vice president for finance embezzled $30 million from it. Applying agency law, the Court held that the financial misstatements made by the vice president to conceal her fraud can be imputed to the company. The control person liability claim against the company's president also survived. The Rule 10b-5 claims against the president and the firm's auditor, however, were dismissed for failing to adequately plead scienter. Puskala v. Koss Corp.