U.S. District Judge Robert Patterson said the class-action complaint did not provide sufficient evidence to suggest that Raymond James Financial Inc. intended to defraud investors by purposely underfunding and then misleading investors about the adequacy of its reserves.
During the class period that ran from April 22, 2008 to April 14, 2009, Raymond James stated that an abnormally high level of bad loans would nearly wipe out profit in its just-completed quarter. Shares of the St. Petersburg, Florida-based company fell 13.5% the next day.
The judge ruled that most of the alleged misstatements made by Raymond James and its executives were too general to be considered purposely misleading while others were simply the results of mistakes in their projections.
Patterson also claimed that the 112-page, 356-paragraph complaint was itself grounds for dismissal, under a federal rule that requires a pleading to contain “a short and plain statement” of the claim.
The case is Woodward v. Raymond James Financial Inc et al, U.S. District Court, Southern District of New York, No. 09-05347.