Securities Class Action V. Threshold Pared Down

Securities Class Action V. Threshold Pared Down - 4/7/2009

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HEADLINES \| SETTLEMENTS AND DISMISSALS \| COURT FILINGS LINKS TO OTHER NEWS \| NEWS ARCHIVE	HEADLINES ARCHIVED SETTLEMENTS AND DISMISSALS ARCHIVED

DISMISSAL NEWS:

Securities Class Action V. Threshold Pared Down
Christine Caulfield

Securities Law 360. April 7, 2009
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EXCERPT: A federal judge has tossed claims from an amended securities fraud class action against Threshold Pharmaceuticals Inc. and two of its top executives, almost a year after dismissing the shareholder plaintiffs' earlier complaint in its entirety. Judge Claudia Wilken of the U.S. District Court for the Northern District of California on Friday partly granted Threshold's motion to dismiss the second amended complaint, saying the lead plaintiff had failed to fill all the gaps of the first amended complaint as ordered on July 11. The judge ruled in July that allegations by the plaintiffs that the biotechnology company had misled investors in documents ahead of an initial public offering could not be construed as actionable negligence on the part of the defendants. Those allegations remained deficient, the judge found in Friday's order. “Because lead plaintiff failed to cure the deficiencies in the first amended complaint as instructed by the court, those claims are now dismissed without leave to amend,” the judge said. Judge Wilken did, however, find that the complaint adequately alleged deliberate recklessness on the part of the defendants for failing to disclose material information about an experimental drug in a April 2006 news release and a subsequent quarterly report. The judge also kept alive a claim of control liability against Threshold CEO Harold Selick. The suit, first filed in July 2007 on behalf of a nationwide class of Threshold shareholders, accused the company, along with Selick and chief financial officer Janet Swearson, of making false and misleading statements about the progress and potential of a drug it was developing to treat a prostate condition. The biotechnology firm works to discover and develop drugs based on an approach that uses the difference in metabolism between normal and diseased cells, according to the company.

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