Opinion ID: 691379
Heading Depth: 4
Heading Rank: 3

Heading: Weeden

Text: 107 Don Hill, the former Director of Corporate Finance of Weeden, also submitted an affidavit regarding Weeden's public statements following the offering. Hill's affidavit describes his reliance on the reports of the Wilkerson Group, a consulting firm, and his good faith in making any public statements about Medstone's market (including Statements 5 and 6, which appeared in a Weeden Research Report of November 15, 1988). He also purchased stock in Medstone just before the FDA denied approval in October 1989. 108 Hill is not named as an individual defendant, however, and his affidavit of personal good faith does not establish as a matter of law that Weeden lacked scienter. The district court cast some doubt on the reasonableness of Weeden's investigation and mentioned a possible conflict of interest in the context of Weeden's due diligence defense to the Sec. 11 claims. Hill apparently became a member of Medstone's board right after the public offering. Unresolved issues remain regarding the objectivity of Weeden's investigation and Hill's membership on Medstone's board at a time when Weeden purported to perform objective research. Given the conflicting evidence, this affidavit from a single Weeden officer does not establish Weeden's lack of scienter as a matter of law for its statements after the initial public offering.