District Court Dismisses Class Action Complaint Against Juniper Networks
On May 17, 2013, U.S. District Judge Lucy Koh of the U.S. District Court of the Northern District of California dismissed a putative class action complaint filed in August 2011 against Juniper Networks, Juniper's CEO, and Juniper's current and former CFOs. Wilson Sonsini Goodrich & Rosati represented Juniper in the matter.
The plaintiffs alleged that Juniper's long-term projections were false and misleading when made because the defendants failed to disclose slumping sales and problems with certain products. Additionally, while the plaintiffs acknowledged that Juniper publicly disclosed its adoption of new revenue recognition rules, they alleged that the disclosure was not sufficiently detailed to inform the market that part of Juniper's growth trend was attributable to the change in revenue recognition.
The court concluded that Juniper's disclosures complied with Financial Accounting Standards Board guidelines and were sufficient to inform the market that Juniper had transitioned to the new accounting rules. The plaintiffs failed to allege facts sufficient to show that Juniper's forecasts were false or misleading when made. Finally, the court rejected the plaintiffs' theories regarding core operations and financial motive and opportunity as insufficient to show scienter. The court had previously dismissed the plaintiffs' first amended complaint with leave to amend.
For more information, please see the court's decision.