* Pursuant to 5 TH CIR. R. 47.5, the court has determined that this opinion should not be published and is not precedent except under the limited circumstances set forth in 5 TH C IR
. R. 47.5.4.

1 15 U.S.C. § 78j(b) (proscribing manipulative or deceptive practices in connection with the purchase or sale ofsecurities: “[It shall be unlawful for any person] [t]o use or employ, in connection with the purchase or sale of any security registered on a national securities United States Court of Appeals

Fifth Circuit 

## FILED September 18, 2007 Charles R. Fulbruge III Clerk 

## IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 06-11093

FLAHERTY & CRUMRINE PREFERRED INCOME FUND INCORPORATED; FLAHERTY & CRUMRINE PREFERRED INCOME OPPORTUNITY FUND INCORPORATED; FLAHERTY & CRUMRINE/CLAYMORE PREFERRED SECURITIES INCOME FUND INCORPORATED; STAN HAIDUK PLAINTIFFS–APPELLANTS v. TXU CORP; C JOHN WILDER DEFENDANTS–APPELLEES

Appeal from the United States District Court for the Northern District of Texas

3:05-CV-01784
Before DeMOSS, DENNIS, and OWEN, CIRCUIT JUDGES. PER CURIAM: * 

### The plaintiffs in this putative securities-fraud classaction allege that TXU Corp. and its CEO, C. John Wilder, violated Sections 10(b)1 

### and 14(e)2 

### of the

### No. 06-11093

exchange or any security not soregistered, or any securities-based swap agreement (asdefined in section 206B of the Gramm-Leach-Bliley Act), any manipulative or deceptive device or contrivance in contravention ofsuch rules and regulations as the Commission may prescribe as necessary or appropriate in the public interest or for the protection of investors.”).

2 Id. § 78n(e) (prohibiting fraud in connection with a tender offer: “It shall be unlawful for any person to make any untrue statement ofa material fact or omit to state any material fact necessary in order to make the statements made, in the light ofthe circumstances under which they are made, not misleading, or to engage in any fraudulent, deceptive, or manipulative acts or practices, in connection with any tender offer or request or invitation for tenders, or any solicitation of security holders in opposition to or in favor of any such offer, request or invitation.”).

3 17 C.F.R. § 240.10b-5 (making it unlawful for any person “[t]o make any untrue statement of material fact or to omit to state a material fact necessary in order to make the statements made, in light ofthe circumstances under which they were made, not misleading”).

4 15 U.S.C. § 78t(a) (imposingjoint and several liability on a person who exerts control over a person who violates any provision of the Securities Exchange Act).

5 F ED
. R. CIV
. P. 12(b)(6).

6 15 U.S.C. § 78u-4(b)(2) (“In any private action arising under this chapter in which the plaintiffmay recover money damages only on proofthat the defendant acted with a particular state of mind, the complaint shall, with respect to each act or omission alleged to violate this chapter, statewith particularity factsgiving risetoa strong inference that the defendant acted with the required state of mind.”). 

### 2 Securities Exchange Ac t and SEC Rule 10b-53 

### by making material misrepresentations and omissions offact in connection with a self-tender offer to purchase certain convertible securities. The plaintiffs also sued Wilder as a “controlling person” under Section 20(a) of the Act. 4 

### The district court granted the defendants’ Rule 12(b)(6)5 

### motion to dismiss the plaintiffs’ claimsfor failing tosatisfy the PrivateSecurities Litigation Reform Act’s (PSLRA) requirement that the plaintiffs plead, with particularity, facts raising a “strong inference” of scienter. 6 

### While the case was on appeal, the United States Supreme Court issued an opinion in Tellabs, Inc. v. Makor Issues

### No. 06-11093

7 127 S. Ct. 2499 (2007). 

### 3 & Rights, Ltd., 7 

### in which the Court clarified the appropriate standard for determining whether a securities fraud complaint gives rise to a “strong inference” of scienter, within the meaning of the PSLRA. At oral argument, the plaintiffs indicated that remand to the district court would be appropriate because they did not have the benefit ofTellabs in drafting their complaint. The district court likewise did not have the opportunity to consider whether the plaintiffs’ allegations meet the PSLRA’s pleading requirements in light of the standard articulated in Tellabs. We therefore VACATE the district court’s judgment and REMAND for reconsideration

.