SAN JOSE, Calif. (Legal Newsline) - A federal judge has ruled stockholders cannot claim securities fraud in a class action lawsuit against Electronic Arts over its Battlefield 4 video game.
Electronic Arts and its top officials, who were also co-defendants, argued that investors had not shown they had relied on the misstatements when buying stock.
U.S. District Judge Susan Illston stated that plaintiffs Ryan Kelly and Louis Mastro cannot pursue securities fraud claims based on statements made after their Oct. 16, 2013, stock purchases.
However, Illston stated she will allow the investors to substitute new lead plaintiffs who bought stock based on misstatements made on Oct. 29 and Dec. 3. - provided their stock was purchased after those dates.
The judge also agreed with EA that some of the alleged misstatements amounted to nothing more than corporate confidence.
"Defendant Jorgensen's Oct. 29, 2013 statement comparing 'BF4' to a World Series ace pitcher is puffery," Illston stated in her Oct. 20 order. "Defendant Wilson's Oct. 29, 2013 statement explaining that EA 'worked more closely with Microsoft and Sony throughout the entire process' resulting in a 'launch slate of games that are the best transition games that I've ever seen come out of this company' is an inactionable opinion, as well as a vague statement of corporate optimism."
Illston, while dismissing the investors' claims of intentional or deliberate recklessness, gave Kelly and Mastro until Nov. 3 to fix their complaint.
Kelly and Mastro initially filed their class action complaint Dec. 17 against EA and its officers and executives for lallegedly making false assurances to investors about the readiness of its action game Battlefield 4. They represent anyone who purchased Electronic Arts common stock between May 8, 2013, and Dec. 5.
During the class period, the individual defendants ran Electronic Arts as "hands-on" managers overseeing Electronic Arts' operations and finances and allegedly made the material false and misleading statements.
The plaintiffs are represented by Shawn A. Williams; Samuel H. Rudman and Mary K. Blasy; and Corey D. Holzer and Marshall P. Dees of Holzer & Holzer LLC.
The defendants are represented by James Neil Kramer, Alexander K. Talarides and Robert P. Varian of Orrick, Herrington & Sutcliffe LLP.
U.S. District Court for the Northern District of California case number: 3:13-cv-05837
From Legal Newsline: Kyla Asbury can be reached at classactions@legalnewsline.com.