in new york city plaintiffs here are you know vester is in a towson genetics a company that was listed on the nasdaq and we bring this as a securities fraud class action the plaintiffs assert that during the period november two thousand and twelve through october two thousand and thirteen a toaster project lead misled investors in the market to believe that its two key products had been cleared by the f d a for breast cancer screening purposes these two products represented ninety nine percent of the firm of the company's revenues and thus was critical to its success investors did not learn until october of two thousand and thirteen the real truth at that time the f d a compelled to issue corrective disc statements its first the statements were as follows the first product mask that pump had not been cleared or approved by the f d a for cancer screening purposes and its second product the forsyte test had not been approved or cleared by the f d a for any purpose be forced to stop selling as a result of these revelations the stock fell forty six percent be flecked above the damages sustained by our clients in the class the company has never recovered and stock is selling for less than a dollar per share now the lower court dismissed these claims despite agreeing that there were two statements issued by the company that were quote inaccurate we submit that there were far more than these two statements but for purposes of this appeal will just focus on those two because we think that they are far and determine far more determinative the two statements were issued by the c e o of the company the first was in december of two thousand and twelve where in the se said the four psych test was quote cleared by the f d a for breast cancer risk assessment that is in the press release that is correct and that's not a mis statement by ham or he's not mis speaking at the time this is a written statement that's attributed to him and the second statement is also in a press release in february or an interview and february two thousand thirteen again before so i test has gone through the f d a clearance process and it had that process he said it was a multi million multi year process and falsity it's certainly misleading to suggest that when you're marketing your products for breast cancer screening purposes that a product that was cleared solely for this collection of asper it could be used for cancer purposes i must say i don't fully appreciate the distinction between cell differentiation and cancer detection but nonetheless this  honor the approval of the mascot pup was back in two thousand and two or three the company it was used for other purposes and it wasn't until two thousand the beginning of the class period thereabouts that it was linked to this diagnostic test the foresight test with it make a difference if it did indicate that i'm not certain that it would be or your honor because it was the foresight test upon which the market was relying clearly on both instances the c e o is talking about the foresight test and without that this is a meaningless product if they were to this day i mean they could still be marketing that that pump but they're not generating any revenues if your  thrust your case turns on the test not i would i would certainly emphasize the foresight test aspect of that in any of it where your point is is that yes the way they represent the misrepresentations about the test clearing f d a is the that was that would have been material to any reasonable it certainly wasn't absolutely right and the question that it was material that investors relied upon it that analysts relied upon it and the court did not necessarily say the statements were by themselves not materially said in the mix of information they were rendered in material that's because he linked them to the to the  information in the market that would have dispelled was discussed above and if you read the part part if you read the first part of his order it's a it's a lot about the poem state that is really i mean certainly in the registration clear statements about the or clear or statements about the mascot pump but there's nothing in the registration statement with that would lead a reasonable invested to realize oh the foresight test has been approved for and has never been approved and to the extent that they're trying to market this combat combination of products to fifty five million women who may be exposed to breast cancer that they should realize oh no it's not approved at all for that purpose that's certainly not self evident moreover right since we're talking about that prior statement of the registration state and that's as a matter of war we submit not even applicable here because in miller vs the pain this court held out a very bright line test that investors relying upon particular statements in one time do not have to go back and fact check against prior statements they can rely upon the current statement and it's very clear from the reverses train that's that's the outcome at least four men objective factors that the court did not give any way to with sufficient weight to its decision first and foremost the analyst reports it's well known in the security spiel that the analysts are the key to interpretation of data from the companies and they sift through that information to make recommendations that's reflected in the stock price that's what was said in basic versus leveson that's what just as chief justice roberts said recently in the into case arm and here we have direct evidence the dawson securities recommended the buy of the stock in may of two to twenty thirteen well after any of these other statements based on his apprehension that there were two approved products with innovative marketing by this company clearly he didn't get it and there's no reason why he wants to sue that the investor should have gotten it if he could to get the next the f d a compels the company to make restate to make corrective statements to the market the f d a is concerned at that point that doctors are not getting it now if or sophisticated in this area could be misled there's no reason to believe that investors were not being misled as well the source of the information or misinformation in this place this case should also be considered because there it was in this case it's the c e o it's not just the random statement issued in a press release or buried in a s c c it's right up front and here why should investors presume that a c e o doesn't know what he's talking about i mean he made an unqualified statement and last before i stopped for the moment the stock price we have the stock price is reflective of the information that's out there in the market if there are forty six percent that's clearly a prime of evidence that the market did not know that there was no f d a clearance or approval for and i gather you felt no need to amend your honor we did we felt that this was a judge who did not understand and he did the our situation or what we were claiming he did not bother to ask us in complaint is sufficient as correct then we would request is a remain and to allow the case to deny the motion to dismiss and allow the case to proceed on merits discovery and let's face this materiality question at the appropriate time after merits discovery expert reports and the like thank you your arms  good morning your honour's jewel it's bias as well may please the court judge martinez below got this right the defense did not make statements that were misleading to the market the mass device as judge has mentioned was indeed a cleared for a particular purpose well what was that purpose and what i'll point out to here the very beginning your honour's is that as admitted below in the briefing and in the complaint below and here on appeal this mass device had a purpose not just to collect nipple aspart fluid specimens from the female breast and i want to read that to you now i think many other allegations founder on this description is approval by the f honor it said that for a sample collection of ice with the purpose quoting now the provision that the fluid collected using this device can be used to determine and or differentiate between normal precancerous and cancerous cells you've asked the question so in two thousand and three the device was was cleared by the f d a receive a five ten k pre market notification authorization at some point there after the company made very minor changes to this device what they did is initially original form of the device was to express the nipple aspart fluid from the breast collect it in a membrane in the hand pump and then wash those cells collected and other things they determined the better method would be to just take that membrane that had collected the cells take it off of the device itself spray some fixative solution to it drop in a baggie and ship that to the lab what they gave them was a larger specimen size it allowed them to run the foresight to be a problem that they're using a different model that i think is improved that's rather technical but the purpose you read when the mask was approved that the fluid could be used to screen for cancer cells says nothing about whether your a clearance risk is she and that the products after this is approved by the f d a yes and they get me to the next point your honor which is the the foresight test as my opponent mentioned in his opening and i'm he believes that this case revolves around the statements made by dr clay in the company in a press release and in an interview regarding the foresight test which is the other the other half of this case which is the test done in a laboratory  now what is the foresight test the foresight test is a test run on the initial aspart fluid collected through the mass device it is shipped to the lab the lab is a separate subsidiary company of the tosa genetics which is the national ductile hyperplasia in other words abnormal growth of cells in the breast this is not unique to a toast is this really depends on if da clearance well let's get to that and then we'll all go well for investors they want f d a cleared they want fashion and its argument in our briefs and i'll do it here today as well is that those two statements when viewed in context were not misleading to me why are they not misleading in context because you know you can have a great devised to give breast health test for breast cancer risk assessment close quote that was the statement now in that very same press release the company also said to eliminate any confusion that investors may have by that statement focused on and thirteen and didn't they highlight the misstatement we know that what they highlight they highlighted in that warning letter their concerns about the mass device requiring a new five ten k authorization because they had modified i thought they were also they also complained about the now the other complaint was that there was a believe a failure to comply with certain bookkeeping and file keeping requirements under the current good manufacturing practices by the i may have misread the record but i thought that they had alerted them that it was it was i defendant he doesn't relate that but here's here's the point though the point is that that foresight test did not need to be f d a cleared it was a laboratory developed test for forty years through and beyond the class period were not regulated by the i thought the statement by your c e o said clearance risk is bit she more or less was framed phrase in a way that would give the impression that there was statement identified by plaintiffs in the press release in december or not misleading and that is number one because they identified the forsyte test as an l d t therefore not being within the ambit or the jurisdiction of the f d a at the time they  being only patented not f d a cleared and they didn't find the lab as being clean certified which again is an indication that it was regulated by a different set of rules which was the clear certification rules now also taking a broader cont press release describing in fact even quoting from the warning letter on february the twenty fifth they then in connection with their response to the f d a demanded the f d a post their response on the f d a is website and we know at least as of that date march the twentieth the f d a has initial warning letter was on that web site it may have been earlier we just don't know what it is in if you march fifteen did he acknowledge that in detail yes in fact in the march fifteenth interview  referenced the warning letter and again remember in march they had already issued a press release where they described in detail the f t s concerns with force and what the what the tosa product isn't your opponent's position  as is true but now this gets me back to why it was not materially misleading or misleading at all in the in looking at the total mix of information because we get back to again with that with that first  hardly exception to the otherwise consistent description of the foresight test as only being clear certified and pan did not f d a approved the one exception was in december and identified the reasons why in the actual press release confusion was cleared up and then just summarily dismiss in the light of all the confusion it's because you're right and what i would say is there was no confusion to the extent plaintiffs are arguing there should have been confusion or there was confusion that confusion was cleared up in the actual release itself and in statements word confusion even after even even if there was confusion i said your honor yes so i want to get to the second exception to the otherwise consistent statements made by my client regarding the forsyte test and that was in this february twenty second interview that was published on february twenty second in that interview that publication he did say that it has gone through all of the f d a clearance process now he may have misheard the question but the context is clear he's referring to the mass device not the test how do we know this many reasons number one he said we are quote manufacturing it here in the states you don't manufacture a test you conduct a test he was referring to the device also if you look at that phrase in the actual article that's above it and below it are pictures of what the mast device  device next later in that same article it states very clearly that dr chua the company's c e o that he oversaw the clinical testing of the mass device with the f d a that led to its ultimate marketing clearance close quote with the f d a that's also there so all of that would clear up again any confusion by those who may have heard his herb saw his statement think i understand your argument but  if the question is whether a misstatement or in the mission would be misleading important and materially misleading investors that's the issue is does that require expert testimony in manner as opposed to your argument that it doesn't matter no your honor in fact it doesn't even require anything beyond the pleadings and i'll tell you why which is we have a supreme court's decision in the on the care case and this course decision two weeks ago in the line technologies case what those what we know now is that the on the care standard of it of evaluating opinion statements ok applies to section ten b cases not just section eleven cases so to the statements made here in this case and on the carriage has the general language which says that while a statement may be viewed quote in a vacuum of the actual press release or of the interview or of the f c c filing and the broader frame also includes under obamacare in a lie and other things which includes context of hedges disclaimers and other apparently conflicting information all that in the totality of the total mix of information shows that there was no misleading statements made things on your over your time but we took you over it by are questioning do you feel you've covered points i never do your honor but i think we're fine thank you their contextual when you're dealing with an opinion but this is not an opinion case this is a fact case there was no suggestion that well we believe that we are in compliance that we believe good will is appropriate here is a simple fact that was stated f d a had approved the foresight test so adding a care in the recent case cited they have no relevancy to the analysis here i also acknowledge that the foresight test is certified test and therefore it was not necessary to get f d a clearance however that's not what the market understood to be the case if the feel in this case had said there is we didn't get clearance for this we just got certification for we wouldn't necessarily be here but he'd said crown thing quite different he said i've got approval of this i've spent million dollars getting approval on this that that's clear and we misleading and widely investors and analysts should be going through the fine print to realize oh you mean you misspoke then and even this company did not misspeak just on two occasions the f d a came in they were looking at these interviews to investors they were looking at what is being sold to the  the doctors were being misled and that was what was in the warning letter and that was what led to not only having to make corrective statements but to withdraw the product entirely if you given the opportunity to discover and determine e you prepared to do that absolutely you're on because it's already in the record we have the add a list statement the analyst was recommending purchasing the stock the analysts did this in may of two thousand and thirteen this is after the eight months after the registration statement three months after the february statement regarding the fact that the warning letter after the warning letter had been posted but obviously nobody realized that those problems were not just decision a credibility discerning the weight of evidence i don't believe there's nothing in his opinion that suggests even considered the analyst report so it's not clear to me whether it hit his radar or whether he dismissed it entirely it's not clear to me whether he gave any additional weight to the fact that these were the c e o statements and if i may your honor speak to the fact that as my brother has said that well if you read everything carefully in the december twentieth press release you would have realized oh this is not what the was really being said by the c it's in the first paragraph of that press release where there's a statement about boasting of the f d a clearance for the forsyte test for breast screening school breast cancer screening it's not until you get to the very end the second page buried at the bottom where there's a generic statement about what the company sells and it says if i may read the entire two years short path we have a patented f d a cleared medical devices patented lab tests you've got to read that very slowly and carefully to realize oh f d a cleared does not apply to the second half of this sentence and you know despite the fact that it's all jumbled together it's like a jigsaw puzzle new don't realize oh it meant something else and frankly we didn't get it when we drafted the complaint in the first instance but putting that aside this court has spoken in miller versus the need that falsity is measured not by the literal truth but by the capacity to accurately inform rather than mislead no question that the market was misled am alist misled our clients were misled and or was