this securities fraud class action the cavalier fundamental growth fund and the alleged class this case your honor as i said is a securities class action this appeal comes to this court on the dismissal of individual defendant is mr greenberg the c e o and the other individual defendant is mr weinberg the c f o and also the chief operating officer and the main allegations with respect to with respect to mr green a a set of quite detailed allegations relating to his sales of his personally held skechers stock and he sold one hundred and one million dollars worth of his personally held site skechers shares during the only six month long class period and are our contention your honor is that iran has that these allegations strongly support an inference of c enter as to him  these these sales were made with no ten b fifty one dollars plan he didn't purchase any shares during the class period these sales were unusual and suspicious both and the amount of shares that he sold and the profits that he was able to reap during the class period they were unusual in timing as compared to others sales that were made outside the class period and we did quite a detailed analysis looking at control periods of equal to the ration to the class period before the class period and after the class period we also looked at numbers of of years before and after the class period we looked at amounts as we said and if you look at  just ask you to focus and the safe harbor provision and when i understand why obviously oral and written disclaimers were given warning investors that the difficulties of predicting demand right revenue and these that the statements that we allege were misleading or not only in the press releases and the and the conference calls for the st and nd quarters but also in the in the tent you quarterly reports that accompany them and we have items three hundred and three claims with respect to those in particular about the risk factors that are in those ten q s were insufficient and nonspecific and so on in that they didn't tell investors what was really going  on inside the company in the wake of the court strike but to answer your question the basic reason why we don't believe the safe harbor applies is because these are largely misleading statements because of the omission of facts that orders for the b t s season with the back to school selling season from late may through the end of july nearly every one of their customers had cancelled orders because they had already ordered too much earlier in the earlier in the year and that resulted in  suspect how is this something that they hit here's the thing he maybe he maybe he disclosed the fact of the twenty million dollars pulling and maybe he disclosed that he wasn't sure whether there would be an equal shift from the th quarter to the quarter but we dispute that but what he didn't warn is that you had this huge inventory overhang built up in the you know in the wake of the ports strike he didn't disclose that there was this taunt order cancellations and that there would be this lack of back fill orders and what he said was is that despite the call ins that the company would maintain thirty percent growth as it had and prior quarters it would keep rolling on quarter after quarter after quarter and he he adopted the if there are significant omissions the inclusion of caution or if statements is not sufficient that the omissions carry the day even if we think there are cautionary statements it sounded like you were inviting us to say look there are omissions and if we agreed with that that carries the day for you or are you as you now seem to say a knowledging that if we thought the cautionary statements were good enough cautionary statements they overcome the consequences of the omission if you  they do not they do not i mean an omission is an omission ham and our position is that no amount of cautionary statement unless a th unless it fills up the omission unless the risk factor is sufficient to to disclose the implies quite short well if i could address that the substance of that there's only one real risk in there and i think i think misreads and will agree with me on this that the the risk the comes closest to getting to the actual guts of the issues here is there was a risk about klein and demand and possible cancellation of words because of a lack of popularity of certain you know styles of foot where there is a real estate going are you referring to when you when you say that short so in their ten k i believe in all of their ten k s and the ten k is to be to be candid incorporated by reference in their ten q s there is there is a one of their risk factors and it's the only risk factor which we would say has any real specificity talks about the possibility of declines in and you can't ever how low risk factor that will be sufficient if the risk has already materialized in this court has said that how it was times you know at the time of these risk factors being  sell through his and double digit backlogs and he signed on to the three percent growth as a quarter after quarter after quarter you know you know we're on a roll sort of and he signed on to the analyst consensus estimates  and just to remind the court this company was unusual in the sense that they didn't they didn't post their own god most companies of the orders were put their own guidance out there this company did not i don't know why they just signed on to what the analysts would say and this company at least one brick said will work comparable with with what you analysts of told us you think our our earnings will be despite the po despite the fact that he warned that well maybe we won't make it up in the next quarter but we're going to make it we're going to make it and they didn't so you know what what you read in the scriptures really says well analysts they hear what they want to hear that what they heard your ours was that the company signed onto their consensus estimate in the absence of any competing estimate from the company itself and i think that i think is the heart of the issue thank you goldsmith says there's a line of cases that says the safe harbor doesn't apply if they claim an omission that's simply not the law there might be a few district court cases that say that but it's not what the statute says the statute says in any private action arising under this chapter that is based on an untrue statement of a material fact or omission of a material fact necessary to make the statement not misleading plaintiff's claim is that the c optimistic statements about the future were misleading because he didn't disclose the colons and cancellation that that person eisley in the safe harbor and plaintiff cites no decision of this court holding that the statutory language can just be ignored mr goldman said repeatedly that the c f o said they would maintain thirty percent growth that's simply not in the complaint and it's not in any of the transcript and he never said that what he said was that he had comfort or he was comfortable with the nd quarter sorry but in the april earnings call he said he was comfortable with the nd quarter analyst estimates which the company peak by almost ten percent that's not their claim in july he said he was comfortable with the analyst current consensus estimate for the back half of two thousand and fifteen sketchers that estimate plaintiff complaint is  three percent this light minutes does not yield a reasonable inference that the c f o was trying to mislead investors and in fact as mr goldman just said there allegation is that there were twenty million dollars  from that would have been known in earlier in the nd quarter but then there were a whole bunch of cancellations well if there were twenty million dollars in cancellations in poland and a whole bunch of cancellations and they only landed twenty million dollars short by definition and that means that either there weren't a lot of cancellations there weren't as many colons as they say or most likely they got lots of other orders to make up for the poems and cancellations the c f o knew all of those things could happen and so the c f o was not committing fraud when he expressed comfort in the larger number and the problem with a complaint is that they don't quantify what these cancellations were worth they seem to say that the effect on revenue whether that means they were pulled in or there were more orders a q two and then cancellations in q three he doesn't say because he never used the term pull and it is undisputed that he told investors that q two had been extraordinary because of the shift and was not likely to be repeated and when asked to quantify the shift he said it's difficult but if i had to guess i would assume it was somewhere in the one billion five hundred and twenty million dollars range that normally would have gone into q three he didn't hide the fact of the shift he didn't hide the twenty million dollars potential gap in q three and he didn't hide the thirty that there was for q three he even told investors that it would be difficult for the company to make up the shift from q four because that's after the back to school season in a smaller quarter so when skechers missed q three analyst estimates by twenty million dollars no reasonable investor could claim that he had been warned of that possibility and as for the cautionary language that mr goldsmith was talking about what it says is our major customers have no obligation to purchase forecasted amount may and have cancel orders and may change delivery schedule with minimal notice and without penalty as a result we may not be able to accurately predict our quarterly sales this company told investors repeatedly that it can't predict future sales because its customers are uncommitted but more important we don't even need to get to the cautionary language because under the safe harbor the statements are protected unless possible because we haven't seen any slowdown but he said in response to a different analyst question he said it's possible but it would be difficult because q four is a smaller quarter because it's after the back to school season so i don't think he was saying and i don't i don't know what qualifies as a as a slowdown anyway so i don't know that that would be concrete enough to be material in the statement but i think that maybe all that he said he certainly repeatedly warned investors that a bunch of of the challenge statements including every single oral statement on this morning's call that we're talking about and he didn't sell a single share of stock that means not only did he not have a motive to commit fraud but it undermines an inference that the c e o who has just a couple of statements in a quote in a press release resigned to ten q it undermines any motive that he would have to commit fraud but more importantly the c e o didn't dump his stock right after the allegedly false positive statements were made or right before the quote unquote truth came to light he told his stock in chunks throughout the class period and he retained about eighty five percent of holdings making him probably the single biggest loser when the stock price dropped so the notion that if he were thinking there was a fraud going on putting aside the c f o even wasn't part of that or was willing to suffer to go along with it if there was a fraud he would have sold a lot more than fifteen reporting i believe so yes i believe so your honor i know that when executives sell stock they have to file a form or with the f t c i honestly don't know how soon that the plaintiff doesn't dispute that all of the statements are opinion statements and they haven't created sufficient facts for opinion liability under the supreme court two thousand and fifteen decision on the care and this court application of the care tom versus fantasy both of which describe the very narrow circumstances in which an opinion can lead to a security scrod clan we make this argument below that this court has held in martin's the quartermaine that expressions of optimism and projections about the future are quintessential opinion statements martin even says that estimates are a well established species of opinion these are opinions we have a three page argument in our brief explaining why plaintiff thank you thank you let me start by addressing his residence comments about the selling the the district judge said only two things in dismissing the allegations of mr greenberg selling his insufficient he said she said that he only sold about seventeen percent of all of the shares and because mr weinberg had not sold anything that meant as a matter of law and to say that because of mr weinberg didn't sell for any number of reasons that are that do not appear in the complaint or the record to suggest that that means that mr greenberg has no motive i think is a is a very very dangerous precedent to set it's nowhere i mean i mean he may have lost some money on the be sharers but he also this was his company that he founded and you know he obviously wanted to retain some control of his company and these are things that can and should be addressed in discovery and we ha quarterly report as opposed to an annual report and whether a trend is one month two months three months that's really a more of a factual issue i don't think the court you know should be drawing those kinds of of lines necessarily you know when they're these a number which is escaping me that when you have an uncertainty a material uncertainty that exists in the weeks i think i'm quoting now before the filing of a registration statement those cases you have to disclose that and that's that's that's