Opinion ID: 622296
Heading Depth: 3
Heading Rank: 4

Heading: Disclosures After the Class Period

Text: Plaintiff also alleges that defendants' disclosures after the class period revealed their knowledge of integration issues during the class period. See JA, Vol. 1 at A103-07. But the disclosures do not suggest that defendants knew or recklessly disregarded information contrary to their public statements. For instance, in a conference call on February 7, 2008, O'Hara explained: Our service challenges in 2007 arose from the rapid integration of the companies we acquired, and the complications associated with simultaneously trying to operate the disparate processes and systems of the acquired companies, while developing the long-term operating environment. The service challenges fell into two broad areasservice quality and management, that is how well do our network and services perform from a quality standpoint once service has been initiated for our customer; and service delivery, the process of taking a customer order and then activating the service. Our service quality and management deteriorated through the first half of 2007, but as a result of numerous organizational process and systems changes, we have generally returned to the quality levels that we enjoyed prior to beginning the integrations, and our performance metrics are generally equal to or better than the levels that our customers were experiencing at the beginning of 2007. An exception to this statement is certain enterprise customers on legacy networks that have not yet been fully migrated to the Level 3 network. Id. at A105. While this disclosure addresses the issues Level 3 experienced during the class period, it does not constitute an admission that defendants spoke fraudulently during that time. Rather, it reflects defendants' hindsight review of the integration process. This contributes nothing to an inference of scienter. Fleming, 264 F.3d at 1260. Ultimately, the facts plaintiff alleges may constitute a brushstroke or two, In re Cabletron Sys., Inc., 311 F.3d 11, 40 (1st Cir.2002), but they fail to paint a portrait [that] satisfies the requirement for a strong inference of scienter under the PSLRA, id. Because plaintiff's complaint does not allege a primary violation of the securities laws, his Section 20(a) claim also fails. See Maher v. Durango Metals, Inc., 144 F.3d 1302, 1305 (10th Cir.1998).