Opinion ID: 214714
Heading Depth: 1
Heading Rank: 1

Heading: introduction

Text: Lead Plaintiff New Mexico State Investment Council, individually and on behalf of all others similarly situated (Plaintiffs), appeals the district court's grant of Defendant Ernst & Young's (EY) Motion to Dismiss. The claims against EY stem from a securities class action complaint against Broadcom Corporation (Broadcom), certain Broadcom officers and directors, and Broadcom's auditor EY (collectively, Defendants), for a fraudulent $2.2 billion stock options backdating scheme. Plaintiffs specifically allege that EY, as Broadcom's auditor, knew of, or recklessly disregarded, Broadcom's fraudulent backdating actions yet issued unqualified audit opinions attesting to the validity of Broadcom's financial statements. The district court granted EY's Motion to Dismiss, finding the Consolidated Amended Class Action Complaint (Complaint) failed to adequately plead scienter against EY. Plaintiffs contend on appeal that the Complaint contains well-pled factual allegations sufficient to survive a motion to dismiss. EY argues dismissal was proper and, in the alternative, the district court's judgment should be affirmed based on Plaintiffs' failure to sufficiently plead loss causation, a ground the district court explicitly did not reach. [1]