Opinion ID: 2655931
Heading Depth: 4
Heading Rank: 4

Heading: Other Allegations of Motive

Text: Plaintiffs proffer a number of general business motivations from which they would have us infer fraud. They contend that MuniMae wanted to artificially inflate the price of its shares to attract investors, fund corporate acquisitions, avoid a default on loan covenants, and obtain favorable loan terms. We decline, however, to infer fraud from financial motivations common to every company. See Ottmann v. Hanger Orthopedic Grp., 32 Inc., 353 F.3d 338, 352 (4th Cir. 2003) (“[C]ourts have repeatedly rejected these types of generalized motives--which are shared by all companies--as insufficient to plead scienter under the PSLRA.”). Although MuniMae conducted numerous offerings and acquisitions during the class period, very little of this activity occurred after any officer is alleged to have known that the FIN 46R accounting was flawed. It is true that the Company was aware that consolidating LIHTC Funds could affect its debt covenants, as the initial consolidation in 2004 would have caused it to default on at least two debt covenants. But MuniMae disclosed that fact, and it was also able to negotiate waivers on each covenant to avoid default. In short, nothing about the specific facts alleged render MuniMae’s general business motivations particularly suspicious.