Opinion ID: 203099
Heading Depth: 3
Heading Rank: 2

Heading: Enrollment Projections

Text: Again, on the theory that accurate enrollment projections were key, [11] the plaintiffs find fault with this passage from the Official Statement: As of April 3, 1998, applications received by the College to date total 879, an increase of more than 18% from April 3, 1997. The total of 879 exceeds total applications received for the fall 1997. The majority of increases have been the traditional freshman application pool. Based on this increase in applications, historic rates for conversion of applications into enrollments, the number of applications from freshmen and deposits received to date, the College believes that it can reach its goal of enrolling 225 new students for the fall of 1998. . . . The plaintiffs do not challenge the facial accuracy of the college's contemporaneous figures, but allege that the use of the number of applications for the fall of 1998 was misleading for several reasons. The plaintiffs argue that because Bradford had begun accepting standardized applications submitted over the internet, this artificially inflated the applications numbers. The goal of 225 new students in fall 1998 was allegedly unrealistic because ultimately, the acceptance rate dropped and Bradford had fewer actual acceptances for fall 1998 than the previous year. Finally, the plaintiffs allege that by the date of the Official Statement, the defendants knew that the number of students who had placed deposits for fall 1998 had declined by almost 20%. These allegations fall short of establishing that the enrollment projections were materially misleading at the time of the Statement. A plaintiff may not plead fraud by hindsight; i.e., a complaint may not simply contrast a defendant's past optimism with less favorable actual results in support of a claim of securities fraud. Shaw v. Digital Equip. Corp., 82 F.3d 1194, 1223 (1st Cir.1996). There is nothing in the amended complaint to establish that the defendants were aware of facts, at the time they made their predictions, that would have made those predictions unreasonable, if they were unreasonable. Even now there is no basis to conclude, from the plaintiffs' premises, that the predictions were unreasonable. It has not been demonstrated that accepting applications by internet for the fall of 1998 would inflate the college's application numbers or somehow lead to lower matriculation rates, or that the defendants had any reason to think this. Similarly, while the amended complaint, without giving specific numbers, quotes the actual acceptance rate for fall 1998 and claims that Bradford had fewer actual acceptances [in fall 1998] than it had for Fall 1997, it does not allege in any detail how the defendants could have forecast that outcome in May 1998. The allegation regarding the drop in actual deposits, as opposed to projected deposits, comes closer, but it does not allege enough detail to satisfy the pleading standards of the PSLRA. The amended complaint alleges there was a 20% year-over-year drop in actual deposits as of May 1998, but does not state with particularity all facts on which that belief is formed. 15 U.S.C. § 78u-4(b)(1). The plaintiffs have not included details about how they were able to identify the 20% figure, much less whether this information was known to the defendants at the relevant time. Standing alone, this is insufficient for an allegation of securities fraud. It is true, as the plaintiffs argue, that the PSLRA does not require plaintiffs to plead evidence. See Cabletron, 311 F.3d at 33 (citing Cooperman v. Individual Inc., 171 F.3d 43, 48-49 (1st Cir.1999)); Shaw, 82 F.3d at 1225. But more meat was needed on these bones.