fund which it sells units to the public from and is the shares in that mutual fund which is why they are here today and why they are representing the class february th statement that says we feel very much that it's going as expected they may th statement the chairman of the board nearly all of the employees transferred over from their previous provider said we are now reaching a level of recruiting that from a rate perspective is an appropriate level we feel that we're at the right rate for recruiting in each one of those set those statements there is a number and is a number that was never made public was never disclosed that contradicts those statements and when you have it you ation where material information is not disclosed that should have been disclosed and contradicted by the fact that there were seven hundred and fifty four health professionals that were planned and assumed to be transferred over from the ottos company to percent five hundred is what the at the best estimate for ms wolf who ran the operation on the ground in london seven hundred and fifty four is what appears in the contract is the issue number that will be transferred over well what would the number have to be for nearly all not to be misleading in your view well i think over thirty four a close to thirty five percent clearly dies it i of this magnitude let me just play out this one more thought just because this is an important point of why this difference is not trivial and indeed is critical under the contract assumptions in order for maximus to make money it had do have face to face assessments of these people who said they could no longer work they can make paper assessments but where they got the cash from as a practical matter was the face to face assessment so they needed trained health care professionals who knew how to do this in place and they thought on day one they were going to get seven  and that's what the market thought it turned out to be east five hundred dollars or about two hundred and fifty four dollars or less now what does that add up to and i grant these are very very rough it is not disputed that a a trained health care numbers you can do in a week thirty thousand dollars you could do in a month and over three hundred thousand dollars assessments that you could do in a ten month year and what we know is a good job of upping how how much they were going to get for each assessment and the arithmetic is not perfect it was one hundred and ninety pounds about two hundred and fifty dollars so if you put all that arithmetic together  what was not there that people thought would be there and reasonable investors thought would be there and assumed would be there was seventy five million bucks worth of of of revenue and instead of that they had to fill they have the five hundred and they had to hire ms will said they were she had plans to hire a one thousand and they had to train the one thousand and so on and so forth and that took some ra have you have to look i thought you were lying on her testimony or that's one of the things i'm relying on but i'm relying on her testimony is important just since we're on it and then i'll get off of it that's important because it corroborate what the court did not focus on which was that she said it was her who gave the interview to the guardian and it was accurate that's really what the parliamentary testimony is is there for so we allege that it was five hundred or seven hundred and fifty four that's in title two to be taken as true and that and that we two hundred and fifty four of seven if the force thirty four percent roe say n alright then the what they did was seventy six percent i said seventy five dollars to actually seventy six percent it isn't nearly all and that's more real money question is how soon were they going to make money and where did they start from and they started from behind the eight ball because they did not have these people transfer and by the time they could fill that gap they had to recruit them and train them and so on so it's it was a very big deal and it led to the net effect that they didn't make their earnings that they projected in fifteen they didn't make  sixteen and there may be a dispute but this put back the whole project back at least twelve months if not eighteen months or more and this is how it started now one could say what's the and seventy five percent well twenty five percent is clearly material if i walked in here and said well they didn't tell a lot of how much money they made by twenty five percent and said that's material everyone would be nodding i mean that's just five percent is usually the place where you start to argue about me are you healthy is there any anything in the record that shows that either  actually read recruitment reports there are we can get the recruitment reports and the data into reston virginia we cannot get it on to their  remember the work reports were submitted to the british government these weren't just lolo not just a name friends that asked to be a strong and friend i understand well no scienter as a whole has to be a strong inference not every single has to be a strong inference we're talking about a holistic analysis the bottom line is that leslie wolf reported to mr caswell mr casual before he goes out and he tells the world and tells investors about his company he can call her up or send her an e mail saying is this right and there are numerous courts that have held that access to that extent of information if it's not on is recklessness it's not the hardest course i enter intent in the world we don't contend that we contend that it's a form of recklessness when you have that degree of access you also have the additional fact and this is from the november conference call where mr mo virtues of mr howard as well and talked about he was over in london all the time and he knew all about angle and he was mr angle and i can quote that for you if you want but that i would submit is a is a fair a fair summary so there's no question that he had intimate knowledge of what was going on with this contract which was then the biggest contract in the company so there is little doubt that you can have an inference that goes up to monto money and to caswell based upon their access to information and in the case of caswell his personal involvement in it which goes beyond just his position if it was just what was the title on his door that's not enough we grant you that but he went over there and read in the november conference call what mr mon tony said about m right perspective is an appropriate level where feel we're at the right rate for recruiting the numbers there and this gives you a broader swing than thirty four percent is their internal targets were two hundred and dollars recruit they needed to recruit a month and they were cruising about one hundred dollars a month so they were way behind what they were saying and they made a statement that suggests  that they were in a position that was inconsistent with what was in internal documents repeatedly and was not disclose the public and i'll make one final comment there are more internal documents in this case than i have ever seen in any one of these cases we got internal documents from people in britain who just threw us through a lot of stuff so this is a not the case of some plaintiff's lawyer dreaming up some theory at three o'clock in the morning thank you thank you may please the court your honor i'd like to actually start with c enter because i think this court has had the opportunity to address the question of c enter many times over the course of the last few decades and those cases make clear that this is a weak weak case c enter there are cases where much stronger allegations that pointed to an inference of fraud were still found to not satisfy the high standard under the securities laws for establishing a strong inference of c enter for example the eights matrix kaplan mcquire cases all presented much stronger cases of an inference of fraud and nonetheless this court concluded that that was not a sufficiently strong inference a point in particular to the yates case where th the defendant in that case had issued several accounting restatements had several times missed financial deadlines had fired its accountants and multiple c f o has resigned and there were insiders who had sold respectively thirty seven and twenty eight percent of their holdings nonetheless the court said this is not a struck case for a strong influence of c enter similarly in matrix capital the company had admitted that there was fraud in the regional companies admitted that there were accounting errors admitted that there were multiple accounting restatements admitted that there were rampant red flags and admitted that the senior management of the company had created a deficient tone at the top which the court interpreted to mean explicitly that they had created an atmosphere for insufficient controls in addition the court concluded that there was an inference that there might be a motivation to more private security sales of over four hundred and fifty million dollars during the class period but the court still concluded that ences the key the cases go on in other respects to to find situations where there are arguments that can be made about it about c enter but the court rightly weeds out those cases and says this is not a case for a strong influence  enter public employees versus the lloyd the ottoman case and the teachers retirement system are all situations where the court recognized some arguments that would could could support an inference and see enter but concluded that this is not a strong case of center and i'd ask you to look in particular at the ottoman case because the parallels between this case in the autumn and case are really uncanny in that case the allegations were that there were too many employee departures we had a situation where the question is whether there were enough employee recruitments coming in but they're both relate to the number of employees and in autumn in case the court noted that the statements in question were general descriptions about the phenomenon of employee departures not necessarily representations about specific numbers that's exactly true so if you look at state number leavitt you have statement number eleven or the rd one yes however we're characterizing it right now so what is your argument with respect to it statement on the number eleven needs to be taken in its full context and you need if you read the full context of that company the speaker in that case  because last causation doesn't establish a connection between that statement being supposedly fraudulent and as such so you're not claiming that it's not actionable just because it's an opinion that's one of the reasons i mean while the doctor they asked you for your recent i gave you recruited four hundred and fifty p what if they had when they believed there was an internal e mail stating that they were not reaching their recruiting goals that's not what he said build upon it so what if they had alledged would that be sufficient i don't think so because  the statement is not that we are reaching our goals that the goals may have been much higher than what they needed in order to reach the right level what he stated was that he there reaching about the right level given all the things that were going on but the goals they in y set could be much higher than what they needed to reach the appropriate level and what he did is he then explained the context that the challenges that they were confronting were not simply a question of the initial recruitment but retention through the train so if there was an email saying that they were to each other we're not reaching what we what we want to hear that would make this actionable you might have to see exactly what the allegations are that would come that would certainly come closer but that's not what  that is the key language that he is expressing his manager and he also says we're now reaching right right so he's expressing a management judgment about a process that had been taking place throughout the year and they were then reaching the right level for this initial stage of the process the initial recruiting process he then explained that initial recruiting was really not no longer that the big problem the big problem was retention through the training process and getting them to the point that they were productive at the level that they could be productive at are but he's also saying that neither of those is a big problem right and this is the challenge statement no your honor in the challenge statement he's talking about we're now reaching the honor in the november statement he says that recruiting is no longer a significant problem we're reaching about the right level the problem we have had including the problem that they still had was the problem of retention through the training process that follows talks about the problems that they were confronting with retention and with training so i don't think it's misleading at all certainly it's not the kind of statement that is the basis to conclude that there see enter this these minor variation these minor expressions of judgment about whether they're reaching the right level of recruiting or not coupled with an expression or an explanation about what the entire process involved this is not the kind of statement that this court has found to be indicative of this is the kind of statement the court has repeatedly found represents management judgment judgment expressions of opinion and the kind of soft optimism that is not the kind of statement that is between israel within the  the only thing that i would point to is that mr dubbs made much of the five hundred number is very important there for their claims but importantly that the complaint actually never even alleges that only five hundred dollars people transferred the complaint never alleges that what the complaint alleges is that there was this newspaper article the guardian which explicitly said that there's roughly an extra one thousand people that will recruit that is about the number we need about one thousand two hundred full time clear that year to contract they are now that's the number of the full all in number after recruiting a right engine and retention that if you look at page four hundred and seventy five thousand four hundred and seventy six of the appendix this this is the transcript of the hearing what you'll see is that david haley who was the atoms representative the former contractor that maximus took right from and he explains that they transferred seven hundred and forty eight full time employees right what's followed then on the next page is leslie wolf is asked and she says yes we did attract the right number initially but they weren't state so the notion of five hundred is really just an argument that's that's sort of taken the front of the stage through the course of argument it's not actually even an allegation in the complaint it's a it's  best and inference that possibly could be drawn from the newspaper article but as this court has done for example in the phillips case from the ninety's and and i believe the mcguire and matrix capital case the court's not required to accept those characterizations in those inferences even for purposes of figuring out whether the statement was false to the contrary you strip out characterizations that are the core facts and out and analyze the facts themselves certainly for purposes  c enter what you have is at most a situation of stacking an inference upon an if or inference for purposes of imputing some state of mind to someone in the court has been explicit that you cannot do that in the mcguire  the parliament was examining the assumptions that the administration used the u k administration used for purposes of the contracting and how the contracting had gone through the st year of the of the of the contract and so they were examining how this process had played out as process of initial transfer recruiting more training them getting them productive and so when they talk about the comptroller in the auditor general they are what capacity are they are they part of this committee or i my understanding i don't i don't i couldn't swear to the details but my understanding is that it's similar to the general accounting office in the united states congress but if you had for example this is a congressional hearing you'd have the senators and the congresspeople they have a bunch of staff these people staff were they part of that of that group the public accounts committee i think they're i think they're they're they're not they're not a corrective disclosures pointed out that throughout the course of the class period there were several instances when there were problems that arose in the course of trying to get the regulatory approvals in order to complete the transaction that was a question and the court said that that's fine that these disclosures may have disclosed that there were reasons to doubt throughout the course of the class period that the transaction would be would be consummated but what the disclosures did not do is indicate a reason to have a reason to conclude that the statements that were made were fraudulent that is that the issuer at the time had already concluded during the course of these challenges that the the transaction wouldn't go through and they said that that was necessary for cost loss causation because the loss causation is requirement is intended to prevent a situation where adverse events were negative news that reflects disappointing performance is turned into the basis for a securities fraud what is needed is not just adverse market events including failure to meet projections what is needed is something that ties back ties the disclosure initial disc or excuse me that the corrective disclosure ties back to the misstatements that were made and shows that they were in fact misstatements at the time they were made not that they just turned out to be wrong not that they just turned out to be overly optimistic when made but that they were fraudulent or reckless which is a species of intentional misconduct at the time that they were me and i don't think that the corrective disclosure in this case do that they merely disclose disappointment relative to the optimism that the company's management had throughout the course of the last year so i think that the judge trying to was correct in truly chilling the case there are some some plants that are not crops but wheat and this is one of those cases and that the p s l r a in particular was intended to authorize and require courts to weed out cases that is not present at the threshold a strong basis to conclude that fraud had occurred the cases are supposed to be weeded out before they can even get to discovery and judge trying to recognize that the obligation to do that and i believe you're this court case is certainly array and the supreme court's decisions that show that the court's need to act as as gatekeeper so to speak to prevent securities fraud cases from proceeding without a strong basis and if there are no other questions i'd be happy to y scienter st thing one has to remember is the securities laws were designed to have full disclosure to all investors and if you do that and you're reckless in doing that then there is liability there is civil liability you don't go to the electric chair their civil liability so coming out and parading out some of the worst cases where there's where there are statements and awful conduct doesn't really isn't really a test of anything if every case has to be a bernie made off case there will be no securities laws and that's the that's the problem that is securities case they're pretty hard to prove pretty hard to plead they are let's be clear about that there's no they also said justice ginsburg also said you have to take all the allegations of the plaintiff and take them as true and then compare them to other possible scenarios so for example looking at something we never played we never talked about this guy mr haley and his his testimony that's rank air it shouldn't even be looked at now you can look at what we allege and come up with it and say it's not enough you can say access isn't enough you can say it's ok if caswell is sitting there he's about ready to go on to a conference call he could call those fully wolf and double check the information and he didn't and that's ok you can say that's ok you can also say that's not bernie murder off  that means these numbers thus if a registration statement omitted omits material facts about the issuers inquiry into or in the or is important or knowledge concerning a statement of opinion that is actionable and that's the omissions part of ami care not the misrepresentation part of obamacare which has a series of different tests so the statements do not fall because of care now as to loss causation i would respectfully ask you to look at what the analysts say that's the best evidence of what the market thought at the time and what was going on and why they thought the stock dropped and you will find they say the stock dropped because they were having problems in volume because they didn't have enough people or in recruiting because they hadn't recruited and so on and so forth so there are reasons for it to drop the suggestion that you have to flagellate yourself in public and disclose the quote unquote fraud isn't the case you have to the securities laws are about facts and if facts come to light that had not been disclosed and as a result of that the market goes down that is enough for a loss causation so in  if for any reason you find that mr monteux money or mr kaz well we're not reckless and we're arguing they were reckless we're not saying that bernie made off then you have to reach the issue of corporate sunny enter there is no question no question in london was all over this contract she knew everything about recruiting everything about and she was the principal interface with the british government this person and her is imputing to action for all the reasons we sent her brief thank you for letting me go over it thank you very much we will ask our clerk to a