On November 24, 2020, the U.S. District Court for the Northern District of California issued an order dismissing with prejudice a federal securities class action lawsuit filed against Wilson Sonsini clients Invuity Inc., its former chief executive officer, and its chief financial officer. Judge Jeffrey S. White held that the complaint failed to allege any false or misleading statements and failed to allege scienter.

The complaint was filed following Invuity’s announcement of its Q3 2016 earnings, which fell short of guidance issued in Q1 2016. The complaint alleged that Invuity was aware of, but failed to disclose, a negative sales pattern affecting revenue from existing customers. Judge White held that because Invuity had not made any specific prediction regarding the level of revenue growth from existing customers and the negative sales pattern affecting those customers was not necessarily inconsistent with overall revenue growth, the plaintiffs had failed to adequately state a claim for securities fraud.

Since this was the plaintiff’s fourth iteration of the complaint and the defendants’ third motion to dismiss, Judge White granted the motion, this time with prejudice, and entered judgment  in favor of the defendants.

The Wilson Sonsini team representing the defendants included partner Nicki Locker and associates Charles Talpas and Ralitza Dineva.

Please see the court’s order and judgment for more information.