CA1: pleading under the PSLRA

In re Credit Suisse First Boston Corp., No. 05-1646., affirms the dismissal of the plaintiff’s Section 10(b) case on the grounds that it did not plead with enough specificity the injuries of the plaintiffs as required by the Private Securities Litigation Reform Act (PSLRA), 15 U.S.C. § 78u-4.  Although the court notes that the authority is sparse, and the question is close, the court concludes that the plaintiff’s allegations that CSFB told its investors one thing (regarding what stocks to buy) and while taking opposite positions did not demonstrate the level of scienter “scienter in order to satisfy the PSLRA standard.... The bottom line, then, is that while the plaintiffs' allegations regarding the obvious conflicts of interest and general state of corruption within CSFB's analyst ranks may be enough to turn the stomach of an ethically sensitive observer, they are insufficient, on their own, to support a fraud pleading with respect to the subjective falsity of the eight ‘buy’ recommendations...”