A district court in the Southern District of Florida dismissed a class action complaint asserting claims for securities fraud under Section 10(b) of the Securities Exchange Act of 1934 against a wireless service provider’s outside director, Nicholas Peraticos. The complaint asserted that Peraticos, along with his co-defendants, made material misstatements in press releases and documents filed with the Securities and Exchange Commission. In particular, the complaint alleged that Peraticos signed the wireless service provider’s 2005 Form 10-K, which allegedly omitted material facts concerning alleged mismanagement, arrests and other bad acts by the company’s officers, as well as Peraticos’ own purported mismanagement of a foreign business he owned.
In granting Peraticos’ motion to dismiss under Fed. R. Civ. P. 9(b) and 12(b)(6), the district court found that the allegations against Peraticos failed to meet any of the elements of a Section 10(b) claim. Most glaringly absent from the complaint were allegations sufficient to establish that Peraticos had the requisite scienter with respect to the alleged omissions. In this regard, the court held that the complaint did not allege with any detail what information Peraticos knew about the alleged bad acts or what duty he had to disclose them. (In re Pegasus Wireless Corporation Securities Litigation, No. 07-81113, 2009 WL 2997006 (S.D. Fla. Sept. 21, 2009))