that the district court committed to reversible errors in connection with its dismissal of our securities class action complaint first off we believe that the district court erred when he helped we did not meet with the requisite level of particularities of the falsity and see enter with respect to the company's feb twenty seventh two thousand and two affirmative statement to the market that it was not channel stuffing the second error that we four months after the company made its february twenty seventh and i will add that it was channel stuffing the company turned around and said the exact opposite the company admitted and they do not use the magic words channel stuffing which is a point the defendants ha e had hit on very very hard here but what they say is quote certain products that were shipped in the first quarter may have taken similar sales from the second quarter that's the language of the defendant company so what  so what your honor up there or others that support the tea allegation regarding channels that's a business your honor we don't believe that that's necessarily a business decision because that particular mission we believe relates very very closely or is very very similar to the language that the circuit used in the second the heart ruling case where in the language of the circuit channel stuffing is the oversupply of distributors in one quarter pleaded with respect to false financials an accounting violation you would necessarily if you were going to assert claims that the reporting financials were false which we are not taking up for the purposes of this appeal plead the names of the distributors the amount of product that were actually channel stuff and we have three confidential witnesses who we believe provide allegations of fact regarding those issues which when taken in conjunction with the company's admission at the end of the class period as well as the reaction in characterization  first quarter two thousand and two that the company channel stuffed with respect to certain distributors six to eight months worth of product that would eventually have to be worked through that it necessarily follows that their revenues during that period were inflated respect to that allegation i believe we also have the statements of analysts who responded to the company's disclosure and the analysts uniformly called what the company admitted at the end of the class period channel stuffing and also you realize that you have a very high heartbroken case which dealt with whether financials were falsified were not alleging that the financials themselves for the purpose of this appeal were false or merely alleging that the company said it was not doing something which may have been particular a perfectly legitimate at a time when it was doing it and that's a sort of the company's i c and russia subsidiary materially false or misleading during the class period specifically we allege that the company materially misstated the asset values they claim to the assets were worth one hundred sixty to two hundred sixty four million dollars during the class period and i believe it was may of two thousand and one he had two meetings with mr mcdonnell team these with mr panish and sent twelve e mails to mr de rodney and told them what he thought was going on why the assets needed to be written down in that in response the company planned to write the assets down by forty million dollars but did not want those assets down only because they did not want to scuttle a corporate bond offering in july two thousand and one from a reserve the balance my time actually excuse me before i do  that i just want to address something that i had in a briefing and didn't get to hear the oral argument is the take of in credit we're talking about the propriety under fast one forty four he's almost uniformly disfavored by circuits across the country because it's necessarily specific fact discussed but before i do do that i think it's important to talk about how it is that we arrived here this appeal presents a case where the district court judge carefully review not once but twice the allegations of plaintiff complaint and in a thoughtful manner applied the standards that have been set down by this court in numerous decisions with respect to cases that are governed by the when the point that i really wanted to get through to your honor in the introductory remarks is that the district court's application of those standards are within the ma and in oracle and in voters decisions where this court found the complaints worse sufficient to meet the stringent requirements of the p s l ouray the level of the tail and the level of tao the point decided to twenty seven confidential witnesses many of whom worked directly with the defendants not through some intermediary which is what the confidential witnesses in this case say  the complaint in doubt explained in detail how the company's own accounting policy was violated and as was raised by the court here the complaint not only dennet identified the particular transactions with specificity but the approximate amounts by which revenue was overstated the dates of the improper transactions the identity of the customers and the employees who were involved in those transactions indeed the complaint went so far is to identify a particular contract where defendant down himself paid one hundred dollars to the confidential witness to go to a warehouse plug in some computer equipment and  adjustments affected the financial statements and how those adjustments were material to the overall financial condition of the company none of that information is in our complaint before the court the second complaints again and oracle and america west your honour's specific details with respect to america west numerous correspondence with the f d a the growth of the letters who received the latest what the substance of the letters for  settlement negotiations details about what the company knew at the same time it was making statements about the fact that they had the maintenance issues behind them again your honor if you compare the details and cooperation in those complaints and look at the second amended complaint it becomes clear that a reverse of the district court here would not only be unwarranted but would create confusion for the district courts and would create confusion because of the substantial departure from the standards that this court has carefully established over numerous decisions by numerous panels now with that backdrop of like to go to the channel stuffing claim and then to the provide incentives to meet sales the courts citation to ashworth is instructive when you look at what happened in ashworth that the company made a statement that it's in them tory levels were adequate and the the questions i think are appropriate questions there's no detailing at all what products were involved what the amounts of the products were of the specific transactions all that detail none of it is present in the complaint now counsel pointed to a statement he says well this is where they described i made a false statement and that was the j p morgan analyst report your honor the only state in in that report is unattributable to any of these defendants any of defendants and the court there i'm sorry the authority that the plaintiff cites to your honor demonstrates why that statement is irrelevant to any decision here first of all there's no entanglement with that statement as there in any way in the preparation of that report with respect to the conduit theory your honor it is insufficient it's insufficient to simply have a statement that management believes discussions with management indicates and that authority your honor is the very authority that the plaintiffs cite in their brief so again you can't even attribute that weeks nowhere does mr leary say the company engaged in state channel stuff with the store leary's that is that the company made a pro active decision to take down inventory there's no suggestion in that that the wholesalers that's the company's main customers were unwilling to buy under the same terms and conditions that they have been buying under for  decision it wasn't reactive to mr leary said may have taken some sales he didn't say it did take sales he didn't say the amount of sales so again mr o'leary statement simply i don't think it creates any inference  fourteen of their brief in their opposition to i c s motion to dismiss the second amended complaint and this is the record cite for this is one thirty six your honor the subheading in that group brief think we've addressed all that in our brief the one point i do want to make i think it's worth noting the california territorial manager your honor who your honour's who alleges that she believed th means that the country doesn't sell or manufacture a virus it's a licensing arrangement with sharing plan the company does earn substantial revenue in terms of royalties are no question about that it is an enormous of revenue for the company but the company doesn't sell a company doesn't manufacture it it's a pure of licensing agreements so there's just no reliability to these confidential witnesses and that's even if you assume that they have the same level of detail that you had  around which isn't mentioned isn't distinguished nothing lays out what you need under one forty four first you have to have a change in circumstance the complaint makes clear there's no change in circumstance according  operations in russia was a shambles from the get go now i do think there was a change in circumstance runnable just change for the that are operating conditions improved by more operating results rather increased by seventy percent in the first quarter of two thousand and two we turned a profit so if there was a change of circumstances because the operations were improving significantly so you have this or drive these on cooperated pinion there was no issue with respect to credibility the district court credited mr grodd me as having knowledge about the valuation of assets if you're going to sell them or buy them that has nothing to do with the accounting test for impairment so when you don't have a change of events or circumstances into even if you do because gat has a wide latitude of accounting treatments that are permissible you must state a claim for a gap violation with particularity again in k tell the the court laid out exactly what you do need to do you need to take the m discounted cash flows over the life of the asset add them up and see whether or not the sum of those undiscounted trash will supports the carrying value mr grainger not only doesn't perform that analysis  appears he's not even aware that that is the appropriate analysis and that's ok because he doesn't purport to be an expert on accounting and finally your honor at most what you have here is a disagreement between mr de r about his appeal point about price waterhouse we weren't mentioned a single time in his argument and i suppose that's his right but what was also interesting from mr nelson's argument was that he says that th financials were not false at least as to the any of the revenue or channel stuffing in those related allegations in that regard pricewaterhouse is not mentioned with regard to any of those allegations about challenge stuffing excuse me specifically i think it's worth looking at the record of what specifically alleged there are only fourteen paragraphs out of over two hundred that mention pricewaterhouse most of them are boilerplate recitations of gap were just conclusory statements that c partner in charge of i c in russia's audit was an englishman named tony who along with his staff was completely unaware of the value of the buildings or whether supporting information existed for those values instead the only thing tony was interested in was leasing space in a building  the district judge found that ad most taking it at face value crediting it in the most favorable light to the plaintiff says it's required despite the complete lack of any factual specificity of when this conversation happened what time what assets were referred standards doesn't allow a defendant like pricewaterhouse to defend the claim to prepare to defend the claim to respond to the claim and fraud claims are serious they're supposed to be put in the specificity and securities area there's the extra layer obviously the policies of scienter against my client unless the court has questions i'm not going to discuss mr polishes stock sales because i believe the law is clear and the briefs demonstrate that in light of the contacts just like the other individual defendants mr punches sales with respect to the specific violations alleged rather when distilled to their core opponents allegations amount to basically mr ponit was a hands on manager he received reports he attended certain meetings dacs director of sales quote reported to ponit and other senior managers management and quote received instructions from punch and other senior management it doesn't say what instructions it doesn't say what was reported it doesn't have of the securities fraud kathy class action and that we don't have nearly the volume of confidential witnesses that those cases that i think well we do not have the same level of specificity perhaps with respect to the channel stuffing allegations i believe we do have more charge with these assets and he says that they were overvalued need to be written down that the company concurred with his judgment and planned to write the assets down by forty million dollars off of one hundred sixty million dollars basically chopping twenty five percent of the value of the compan russian operations off the top it's hard to see how that is not specific enough for us for us to proceed with our claims there was a new argument raised for the first time on appeal with respect waxman continued and argued that we specifically have alleged in our complaint an accounting fraud case we did alleging accounting fraud case with respect to the channel stuffing at the district court but we are not required to appeal what mr waxman would like us to appeal if we wish to appeal the one specific statement and we are permitted to do so with respect if you don't you see i believe the position was taken that they were merely careless well in between if you did you see on a partner who was actually named we've given you a reason why he individually and personally stood to profit by his dealings and attempted to do so and i believe that the d s m standard there with respect to mr pa believe that p c s are allegations with respect to the russian write down allegations are more than sufficient we have two meetings where it was discussed we have twelve direct emails and we have planned right down and we have a motive for them not to take the write down to complete this corporate offering i don't see how