Opinion ID: 196921
Heading Depth: 3
Heading Rank: 1

Heading: June 29 Letter

Text: 24 Gross complains that, given the letter's failure to disclose Summa Four's impending poorer-than-expected results for the first quarter of fiscal year 1995, its statements that the company had experienced a strong financial performance and was in a strong financial position are either patently false or clearly misleading by omission. Summa Four disputes this contention, arguing that both statements are completely borne out by the facts alleged in the amended complaint. Summa Four argues that the strong financial performance statement is a backward-looking statement referring to its record results in fiscal year 1994. Summa Four further adds that nothing in the amended complaint, viz., allegations concerning its disappointing first quarter 1995 results, supports the inference that the company was not in a strong financial position. 25 While the issues raised by the June 29 letter represent, perhaps, Gross's strongest claims, we need not choose between the parties' contrary positions. Regardless of the merits, because Gross purchased his stock on May 27, 1994, well before Summa Four issued the June 29 letter, he has no standing to complain about the statements included in the letter. See Shaw, 82 F.3d at 1222 (only individuals who purchased shares after allegedly misleading statement could have suffered a cognizable injury); Roots Partnership v. Lands' End, Inc., 965 F.2d 1411, 1420 (7th Cir.1992) (similar). In other words, because Summa Four issued the letter after Gross had purchased his stock, the statements in the letter could not possibly have inflated the market price that he paid for those shares. Roots Partnership, 965 F.2d at 1420. Moreover, although Gross purports to bring a class action on behalf of all individuals who purchased Summa Four shares during the class period, he cannot maintain an action on behalf of class members to redress an injury for which he has no standing in his own right. Id. at 1420 n. 6; see Britt v. McKenney, 529 F.2d 44, 45 (1st Cir.) (If none of the named plaintiffs may maintain action on their own behalf, they may not seek such relief on behalf of a class.), cert. denied, 429 U.S. 854, 97 S.Ct. 149, 50 L.Ed.2d 130 (1976); see also Lewis v. Casey, --- U.S. ----, ---- - ----, 116 S.Ct. 2174, 2181-83, 135 L.Ed.2d 606 (1996). 26