Court Opinion

ID: 4583246
Source: CourtListenerOpinion
Date Created: 2020-11-03 18:00:35.918236+00
Date Added: 2024-06-11T13:42:38.345929
License: Public Domain

FOR PUBLICATION

  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT

DAVID GRIGSBY; JOSEPH SHEPARD,           No. 19-55042
On Behalf of Themselves and All
Others Similarly Situated,                  D.C. No.
                Plaintiffs-Appellants,   3:17-cv-00667-
                                           GPC-KSC
                 and

BAR MANDALEVY; DAVID SIEBERT,              OPINION
                      Plaintiffs,

                  v.

BOFI HOLDING, INC.; GREGORY
GARRABRANTS; ANDREW J.
MICHELETTI; ESHEL BAR-ADON;
PAUL J. GRINBERG,
             Defendants-Appellees,

                  v.

BOFI INVESTORS GROUP; VICKIE
SIEBERT; CHAO WANG; LARRY L.
DOOLEY; LINDA OSTERMANN; PHILIP
RICCIARDI,
                        Movants.
2                   GRIGSBY V. BOFI HOLDING

         Appeal from the United States District Court
           for the Southern District of California
         Gonzalo P. Curiel, District Judge, Presiding

               Argued and Submitted May 7, 2020
                     Pasadena, California

                      Filed November 3, 2020

    Before: Mary H. Murguia and Morgan Christen, Circuit
       Judges, and Alvin K. Hellerstein,* District Judge.

                    Opinion by Judge Christen

                            SUMMARY**

                          Securities Fraud

   The panel affirmed in part and reversed in part the district
court’s order dismissing, for failure adequately to plead loss
causation, a securities fraud action alleging that defendant
BofI Holding, Inc., and its senior executives violated §§ 10(b)
and 20(a) of the Securities Exchange Act.

     *
     The Honorable Alvin K. Hellerstein, United States District Judge for
the Southern District of New York, sitting by designation.
    **
       This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
                 GRIGSBY V. BOFI HOLDING                     3

    Plaintiffs alleged that defendants denied that BofI was the
subject of a money laundering investigation and falsely stated
that a whistleblower’s separate allegations that BofI made
undisclosed loans to criminals were “disconnected from the
reality of BofI’s highly compliant and top-performing
business.” To establish a causal connection between BofI’s
two statements and declines in BofI’s stock price, plaintiffs
pointed to two articles that allegedly revealed the falsity of
BofI’s statements immediately prior to drops in BofI’s stock
price. One of the articles relied on information obtained
through a Freedom of Information Act request to the
Securities and Exchange Commission; the other appeared on
a website called Seeking Alpha. The district court determined
that the article premised on information from a FOIA request
did not reveal new information to the market, and thus could
not be a corrective disclosure of any misrepresentation.

     The panel held that plaintiffs can satisfy the loss-
causation pleading burden by alleging that a corrective
disclosure revealed the truth of a defendant’s
misrepresentation to the market and thereby caused the
company’s stock price to drop and investors to lose money.
The panel held that plaintiffs may rely on a corrective
disclosure derived from a FOIA response by plausibly
alleging that the FOIA information had not been previously
disclosed. The panel therefore reversed the district court’s
loss causation ruling to the extent it deemed information
obtained via a FOIA request to be publicly available prior to
its disclosure.

    Affirming in part, the panel concluded that the district
court correctly ruled that the Seeking Alpha article did not
constitute a corrective disclosure, in part because it was
written by an anonymous short-seller with no expertise
4               GRIGSBY V. BOFI HOLDING

beyond that of a typical market participant who based the
article solely on information found in public sources.

    The panel remanded the case to the district court.

                        COUNSEL

Jeremy A. Lieberman (argued), Emma Gilmore, Branda F.
Szydlo, and Jennifer Banner Sobers, Pomerantz LLP, New
York, New York; Patrick M. Dahlstrom, Pomerantz LLP,
Chicago, Illinois; Adam M. Apton and Adam McCall, Levi
& Korinsky LLP, Washington, D.C.; for Plaintiffs-
Appellants.

John P. Stigi III (argued), Sheppard Mullin Richter &
Hampton LLP, Los Angeles, California; Polly Towill,
Sheppard Mullin Richter & Hampton LLP, Los Angeles,
California; for Defendants-Appellees.

                         OPINION

CHRISTEN, Circuit Judge:

    In this securities fraud appeal, we consider whether
information obtained through the Freedom of Information Act
(FOIA) can constitute a corrective disclosure for purposes of
alleging loss causation. Plaintiffs, who represent a putative
shareholder class, filed a complaint alleging that Defendant
BofI Holding, Inc. (BofI) and its senior executives violated
§§ 10(b) and 20(a) of the Securities Exchange Act of 1934,
15 U.S.C. §§ 78j(b)–78t(a), by denying that BofI was the
subject of a money laundering investigation. The complaint
                GRIGSBY V. BOFI HOLDING                     5

also alleged that BofI falsely stated that a whistleblower’s
separate allegations that BofI made undisclosed loans to
criminals were “disconnected from the reality of BofI’s
highly compliant and top-performing business.”

    To establish a causal connection between BofI’s two
statements and declines in BofI’s stock price, plaintiffs
pointed to two articles that allegedly revealed the falsity of
BofI’s statements immediately prior to drops in BofI’s stock
price. One of the articles relied on information obtained
through a FOIA request to the Securities and Exchange
Commission (SEC); the other appeared on a website called
Seeking Alpha.

     The district court concluded that plaintiffs adequately
alleged the falsity of defendants’ statements, but failed to
adequately allege loss causation. The court determined that
the article premised on information obtained from a FOIA
request did not reveal new information to the market, and
thus could not be a corrective disclosure of any
misrepresentation. In reaching this conclusion, the court
decided as a matter of law that the information obtained
pursuant to the FOIA request was publicly available prior to
its disclosure. The court ruled that the Seeking Alpha article
also failed to disclose information that had not already been
made public. The court dismissed plaintiffs’ complaint.

    We have jurisdiction pursuant to 28 U.S.C. § 1291, and
we reverse in part and remand. Plaintiffs may rely on a
corrective disclosure derived from a FOIA response by
plausibly alleging that the FOIA information had not been
previously disclosed. If a plaintiff relies on information
obtained via a FOIA request, the pleading burden to allege
loss causation is no different from the pleading burden for
6                   GRIGSBY V. BOFI HOLDING

other types of corrective disclosures. We therefore reverse
the district court’s loss causation ruling to the extent it
deemed information obtained via a FOIA request to be
publicly available prior to its disclosure. We conclude the
district court correctly ruled that this particular Seeking Alpha
article did not constitute a corrective disclosure, in part
because it was written by an anonymous short-seller with no
expertise beyond that of a typical market participant who
based the article solely on information found in public
sources.

                                   i.

    BofI is a nationwide bank that provides various financial
products and services.1 The SEC opened an informal inquiry
into BofI in May 2015 and began a formal investigation in
February 2016, for which it issued two subpoenas to BofI.
The first subpoena requested information about BofI’s related
party transactions, potential conflicts of interests, and loans
to two financial entities. The second subpoena requested
information related to “single-family residential loans
extended to non-resident aliens.” BofI never disclosed the
existence of either subpoena.

    In March 2017, the New York Post reported that the
Department of Justice, with involvement from the SEC, was
investigating BofI for possible money laundering. The same
day, BofI issued a press release stating that it had “received
no indication of, and ha[d] no knowledge regarding, such
purported money laundering investigation.” But on October
25, 2017, the Post published an article titled “Bank of Internet

     1
       BofI, or “Bank of Internet,” changed its name to Axos in 2018, but
it was still known as BofI at all relevant times in this lawsuit.
                  GRIGSBY V. BOFI HOLDING                        7

was under 16-month SEC investigation.” Plaintiffs contend
this article revealed that BofI’s earlier denial of any
knowledge of an SEC investigation was false. The October
25, 2017 Post article was based on a report by a subscription
research service called Probes Reporter that obtained
information about the SEC investigation through a FOIA
request.2 The day after the Post article was published, BofI’s
stock price declined by 4.57%.

                                ii

    Plaintiffs filed an amended complaint on February 20,
2018. It alleged that BofI and several of its executives
violated § 10(b) and § 20(a) of the Securities and Exchange
Act. Defendants filed a motion to dismiss, which the district
court granted, but the court allowed plaintiffs leave to amend.
Concerning the money laundering allegation, the court agreed
with plaintiffs that BofI’s statement that it had “no indication
of . . . [a] money laundering investigation” represented a
material misrepresentation, but the court concluded that
plaintiffs had insufficiently alleged loss causation, another
§ 10(b) pleading requirement, because they had not
sufficiently alleged that the October 25, 2017 Post article
revealed nonpublic information to the market. The court
reasoned that because the article relied on “information
available from a federal agency through FOIA,” the article
only disclosed information that was already publicly
available. The court assumed that “information-hungry
market participants” must have sought the same information
through the FOIA process prior to the article’s publication.

    2
      The Probes Reporter report containing the FOIA information
became widely available to non-subscribers on the same day the Post
published its article regarding the SEC’s 16-month investigation.
8                GRIGSBY V. BOFI HOLDING

In the court’s view, “[w]hat matters is whether other
investors, seeking information about BofI, would reasonably
have been able to obtain [the FOIA] information.”

    Plaintiffs’ second amended complaint asserted that the
FOIA information reported in the Post article had not been
previously disclosed to the public. The second amended
complaint included new allegations that the SEC received
only five other BofI-related FOIA requests during the
relevant time period that were granted in full or in part, that
there can be “significant delays” in the agency’s response to
FOIA requests, and that the agency “often refuses to provide
information regarding investigations in response to FOIA
requests.”

    BofI moved to dismiss the second amended complaint,
and this time the district court granted the motion with
prejudice. The court again concluded that plaintiffs failed to
plead loss causation adequately and reiterated its prior ruling
that “information about a company that is available from its
federal regulator through the FOIA is publicly available to an
information-hungry market.” Mandalevy v. Bofi Holding,
Inc., No. 17CV667-GPC-KSC, 2018 WL 6436723, at *9
(S.D. Cal. Dec. 7, 2018) (internal quotation marks omitted).
The court determined the new allegations regarding other
BofI-related FOIA requests were too speculative or
generalized to plausibly allege that the FOIA-derived
information in the October 25, 2017 Post article had not
already been obtained by market participants. Id. at *9–10.
Similarly, the court concluded that the Seeking Alpha article
failed to disclose new information to the market, and
                   GRIGSBY V. BOFI HOLDING                            9

therefore did not qualify as a corrective disclosure.3 Plaintiffs
timely appealed.

                                  iii.

   We review de novo a district court’s order granting a
motion to dismiss for failure to state a claim under Federal
Rule of Civil Procedure 12(b)(6). Loos v. Immersion Corp.,
762 F.3d 880, 886 (9th Cir. 2014).

                                  iv.

    To state a securities fraud claim under § 10(b) of the
Securities Exchange Act of 1934, a plaintiff must allege:
“(1) a material misrepresentation or omission by the
defendant; (2) scienter; (3) a connection between the
misrepresentation or omission and the purchase or sale of a
security; (4) reliance upon the misrepresentation or omission;
(5) economic loss; and (6) loss causation.” Erica P. John
Fund, Inc. v. Halliburton Co. (Halliburton I), 563 U.S. 804,
810 (2011) (quoting Matrixx Initiatives, Inc. v. Siracusano,
563 U.S. 27, 37–38 (2011)). The disputed element in this
appeal is loss causation.

    “Loss causation is shorthand for the requirement that
‘investors must demonstrate that the defendant’s deceptive
conduct caused their claimed economic loss.’” Lloyd v. CVB
Fin. Corp., 811 F.3d 1200, 1209 (9th Cir. 2016) (quoting
Halliburton I, 563 U.S. at 807); see also 15 U.S.C. § 78u-
4(b)(4). We apply a proximate cause test in which “the
ultimate issue is whether the defendant’s misstatement, as

    3
       Plaintiffs alleged several other material misstatements, but only
these two misstatements are on appeal.
10               GRIGSBY V. BOFI HOLDING

opposed to some other fact, foreseeably caused the plaintiff’s
loss.” Mineworkers’ Pension Scheme v. First Solar Inc.,
881 F.3d 750, 753 (9th Cir. 2018) (quoting Lloyd, 811 F.3d
at 1210). At the pleading stage, a plaintiff need only allege
that the “revelation of fraudulent activity,” rather than
changing market conditions or other unrelated factors,
proximately caused the decline in defendant’s stock price.
Loos, 762 F.3d at 887.

    A plaintiff can satisfy the loss-causation pleading burden
by alleging that a “corrective disclosure” revealed the truth of
a defendant’s misrepresentation and thereby “caused the
company’s stock price to drop and investors to lose money.”
Lloyd, 811 F.3d at 1209 (quoting Halliburton Co. v. Erica P.
John Fund, Inc. (Halliburton II), 573 U.S. 258, 264 (2014)).
To adequately plead a corrective disclosure, a plaintiff must
“plausibly allege that the defendant’s fraud was ‘revealed to
the market and caused the resulting losses.’” Loos, 762 F.3d
at 887 (quoting Metzler Inv. GMBH v. Corinthian Colls., Inc.,
540 F.3d 1049, 1062 (9th Cir. 2008)).

    In general, a disclosure is not “corrective” if it contains
information “derived ‘entirely from public filings and other
publicly available sources’ of which the stock market was
presumed to be aware.” Loos, 762 F.3d at 889 (quoting
Meyer v. Greene, 710 F.3d 1189, 1198 (11th Cir. 2013)).
Because publicly available information in an efficient market
is generally reflected in the price of a security, the disclosure
of confirmatory information—or information already known
by the market—will not cause a change in stock price. See
Meyer, 710 F.3d at 1197; see also Amgen Inc. v. Conn. Ret.
Plans & Tr. Funds, 568 U.S. 455, 466 (2013); Basic Inc. v.
Levinson, 485 U.S. 224, 241 (1988).
                GRIGSBY V. BOFI HOLDING                    11

    This appeal requires us to consider the discrete question
whether information obtained through a FOIA request can be
“corrective” of an allegedly false and misleading statement
by revealing nonpublic information to the market.
Defendants contend that “because market actors could access
the [FOIA] information . . . BofI’s stock price already
reflected it” when the Post published its article. In other
words, defendants treat information that might have been
discoverable through a FOIA request as information that was
already public.

    There are two flaws with defendants’ approach. First,
information must be requested before it can be received
through the FOIA. See 5 U.S.C. § 552(a)(3) (establishing that
the public may request agency records that are not proactively
disclosed pursuant to § 552(a)(1)–(2)). FOIA “‘facilitate[s]
public access to [g]overnment documents’ by ‘establish[ing]
a judicially enforceable right to secure [government]
information from possibly unwilling official hands.’”
Hamdan v. U.S. Dep’t of Justice, 797 F.3d 759, 770 (9th Cir.
2015) (alterations in original) (quoting Lahr v. Nat’l Transp.
Safety Bd., 569 F.3d 964, 973 (9th Cir. 2009)). Information
acquired through the FOIA does not simply reside on a shelf
somewhere, ready for the taking.

    Second, information must be produced before it is
publicly available, and not all FOIA requests yield disclosure
of the sought-after information. Despite FOIA’s “strong
presumption in favor of disclosure,” an agency may
“withhold[] . . . requested documents” under certain
circumstances. Civ. Beat Law Ctr. for the Pub. Int., Inc. v.
Ctrs. for Disease Control & Prevention, 929 F.3d 1079, 1084
(9th Cir. 2019) (quoting U.S. Dep’t of State v. Ray, 502 U.S.
164, 173 (1991)). The FOIA statute contains nine
12               GRIGSBY V. BOFI HOLDING

exemptions that may bar public disclosure of information,
5 U.S.C. § 552(b); see also Hamdan, 797 F.3d at 770. If
exemptions are invoked, the process for appealing their
applicability adds delay even if the information is ultimately
disclosed. See § 552(a)(6)(A)(i); 17 C.F.R. § 200.80(d)–(f).

    Given FOIA’s general framework, the fact that a market
actor lodges a FOIA request on a given date does not allow
the conclusion that the information became publicly available
on that date because FOIA requests do not always result in
disclosures—and even when they do, the disclosures are not
instantaneous. At a minimum, there must be some indication
that the relevant information was requested and produced
before the information contained in a FOIA response can be
considered publicly available for purposes of loss causation.
For these reasons, the district court erred by concluding as a
matter of law that an article containing information obtained
through the FOIA could not qualify as a corrective disclosure
for purposes of establishing loss causation.

                              v.

    A separate but related question is whether information
contained in the FOIA response provided to the Post—i.e.,
the fact that BofI was the subject of an SEC
investigation—had been publicly disclosed prior to the
October 25, 2017 Post article.

    Plaintiffs’ burden is to plausibly allege that “the decline
in the defendant’s stock price was proximately caused by a
revelation of fraudulent activity,” rather than other factors.
Loos, 762 F.3d at 887. In addition, plaintiffs must satisfy the
particularity standard of Rule 9(b). This heightened pleading
standard applies to all elements of a securities fraud claim,
                 GRIGSBY V. BOFI HOLDING                    13

including loss causation, Or. Pub. Emps. Ret. Fund v. Apollo
Grp. Inc., 774 F.3d 598, 605 (9th Cir. 2014), but it does not
require that the causation inference be more than “plausible.”
See In re Gilead Scis. Sec. Litig., 536 F.3d 1049, 1057 (9th
Cir. 2008) (“So long as the complaint alleges facts that, if
taken as true, plausibly establish loss causation, a Rule
12(b)(6) dismissal is inappropriate.”); see also Retail
Wholesale & Dep’t Store Union Local 338 Ret. Fund v.
Hewlett-Packard Co., 845 F.3d 1268, 1271 (9th Cir. 2017)
(noting that Rule 8(a)’s plausibility standard and Rule 9(b)’s
particularity requirement are distinct); Cafasso United States
ex rel. v. Gen. Dynamics C4 Sys., Inc., 637 F.3d 1047, 1055
(9th Cir. 2011) (same). Plaintiffs’ burden is to describe how
the falsity of the defendant’s misstatement was revealed to
the market, not to describe all the ways in which it was not
revealed.

    Here, by effectively requiring plaintiffs to show that no
one else had obtained the same information through the FOIA
before the October 25, 2017 Post article, the court elevated
plaintiffs’ pleading burden. The operative complaint alleged
that the Post article disclosed BofI had been the subject of a
formal SEC investigation, that the article revealed the falsity
of BofI’s prior statement, and that the revelation caused
BofI’s stock price to drop. This was sufficient; plaintiffs
relying on corrective disclosures that are in turn based on
information obtained through the FOIA do not face a special
pleading burden for purposes of alleging § 10(b) loss
causation. See Lloyd, 811 F.3d at 1210–11; Gilead, 536 F.3d
at 1057–58.

    Because the district court dismissed the first amended
complaint for failure to sufficiently allege a corrective
disclosure, the second amended complaint included additional
14               GRIGSBY V. BOFI HOLDING

allegations that the SEC had not disclosed information about
its BofI investigation in response to previous FOIA requests.
Plaintiffs supported these allegations with copies of the
agency’s FOIA request logs. The logs showed that five other
BofI-related FOIA requests were submitted to the SEC,
“granted” at least in part, and listed as “closed” prior to the
October 25, 2017 Post article.

    The district court concluded that the second amended
complaint’s allegations regarding the earlier FOIA requests
were too speculative to demonstrate that the information in
the October 25, 2017 Post article had not been previously
disclosed. Though we conclude that the allegations in
plaintiffs’ first amended complaint were sufficient to
plausibly allege loss causation, we consider the allegations in
the second amended complaint to determine whether they
somehow rendered the initial allegations implausible. We
conclude they do not.

    The FOIA logs do not reveal what information the five
earlier requests sought, much less whether any information
relating to the SEC investigation was produced in response to
them. If responsive information was produced, the logs do
not show whether it was redacted pursuant to one of the
FOIA exemptions. The logs merely show that between the
date of the alleged misstatement and the date of the corrective
disclosure, five FOIA requests relating to BofI were
submitted to the SEC, granted at least in part, and recorded as
“closed.”

   The parties debate what to infer from the “closed” status
of the other BofI-related FOIA requests, but the more
important question is what information was requested. The
FOIA request logs do not say. In a column titled, “Request
                     GRIGSBY V. BOFI HOLDING                             15

Description,” the logs simply reflect that each of the five
requests concerned BofI. The requests could have been
inquiries directed at different information about BofI, and
because government agencies responding to FOIA requests
are required only to “conduct a reasonable search to find any
documents responsive to the request,” Hamdan, 797 F.3d at
770, it is entirely possible that the SEC could have looked for,
but not found, information responsive to the earlier FOIA
requests marked “granted” and “closed.” The record does not
allow the conclusion that any of the other BofI-related FOIA
requests resulted in the disclosure of information about an
SEC investigation of BofI.4

                                    vi.

    BofI asks us to affirm the district court’s loss-causation
ruling on the alternative ground that the October 25, 2017
Post article was not actually “corrective” of BofI’s statement
that it had no knowledge of a money laundering investigation.
We decline to do so.

   “[T]o establish proximate causation, the plaintiff must
prove that when the relevant truth about the fraud began to

    4
       Even if information concerning the SEC investigation had been
disclosed pursuant to an earlier FOIA request, such disclosure may not
have foreclosed plaintiffs’ theory of loss causation. A bright-line rule of
this type would fail to recognize that “a single market can process
different kinds of information more or less efficiently, depending on how
widely the information is disseminated and how easily it is understood.”
Halliburton II, 573 U.S. at 271; see also Meyer, 710 F.3d at 1198 n.9
(“[W]e might be willing to countenance some lag in the market’s
processing of the information contained in these public sources . . . .”).
We do not reach this issue because it is not necessary to resolve the instant
appeal.
16               GRIGSBY V. BOFI HOLDING

leak out, it caused the price of stock to depreciate and thereby
proximately cause[d] the plaintiff’s economic loss.” Lloyd,
811 F.3d at 1210 (quoting Pub. Emps. Ret. Sys. of Miss., P. R.
Teachers Ret. Sys. v. Amedisys, Inc., 769 F.3d 313, 321 (5th
Cir. 2014)). “To be corrective, the disclosure need not
precisely mirror the earlier misrepresentation, but it must at
least relate back to the misrepresentation and not to some
other negative information about the company.” Id. (quoting
In re Williams Sec. Litig.-WCG Subclass, 558 F.3d 1130,
1140 (10th Cir. 2009)).

    BofI contends that the October 25, 2017 Post article was
not corrective because it did not relate back to BofI’s denial
of any knowledge about an investigation. The March 2017
Post article that prompted BofI’s denial described a money-
laundering investigation led by the Department of Justice. It
noted that the SEC was “in the probe” and that the
investigation involved the bank’s loans to foreign nationals.
Though BofI denied knowledge of any such investigation, the
October 25, 2017 Post article disclosed that BofI had indeed
been the subject of a 16-month investigation by the SEC. It
also stated that “[t]he probe was focused on alleged conflicts
of interest, auditing practices, and loans made to two
entities,” and that the information acquired through
FOIA—including the existence of the SEC investigation—
“confirmed two earlier reports by The Post that the bank was
under investigation.” Although the October 25, 2017 Post
article did not precisely mirror BofI’s denial, its report that
the SEC had investigated BofI for money laundering
sufficiently related back to BofI’s statement that it had no
knowledge of a money laundering investigation involving the
SEC. See Lloyd, 811 F.3d at 1210. We conclude that
plaintiffs adequately alleged the October 25, 2017 Post article
was corrective of BofI’s statement.
                 GRIGSBY V. BOFI HOLDING                    17

                             vii.

    Plaintiffs separately argue that their securities fraud
claims are supported by the complaint’s allegation that, on
April 18, 2016, BofI made a false statement in response to a
whistleblower complaint. The whistleblower complaint
alleged that BofI “failed to disclose loans to criminals and
politically exposed persons who put the Bank at risk for
violating the Bank Secrecy Act’s Anti-Money Laundering
Rules.” Plaintiffs’ complaint alleged that BofI issued a
responsive press release that described the whistleblower’s
allegations as “disconnected from the reality of BofI’s highly
compliant and top-performing business.” Plaintiffs further
allege that the truth of the whistleblower’s statement was
revealed in an article that appeared on the Seeking Alpha
website on October 26, 2016.

    The district court concluded that the Seeking Alpha article
could not constitute a corrective disclosure, and plaintiffs
argue on appeal that this was error. The district court
reasoned that the Seeking Alpha article contained only public
information, and that the information did not require
“specialized analysis” to be “readily digestible” by the
market. We agree with the district court’s conclusion, and
affirm its ruling that the Seeking Alpha article did not
constitute a corrective disclosure. The article was written by
an anonymous short-seller who had invested in BofI and who
stated that he “derived [his conclusions] from publicly
available information”—specifically by comparing
information available in public documents. The article’s
analysis did not require any expertise or specialized skills
beyond what a typical market participant would possess, and
it included the disclaimer that the author “makes no
representation as to the accuracy or completeness of the
18               GRIGSBY V. BOFI HOLDING

information.” Indeed, the article encouraged investors to do
their own research.         Although we have recognized
circumstances in which already-public information may
qualify as a corrective disclosure for purposes of alleging loss
causation, see, e.g., Gilead, 536 F.3d at 1058, the Seeking
Alpha article plaintiffs point to does not qualify as such.

                             viii.

    Finally, BofI asks us to affirm the district court’s order
dismissing the complaint on the alternative ground that
plaintiffs failed to adequately allege scienter. Because the
district court addressed only loss causation, we limit our
consideration to that issue and “follow[] the general rule
[that] a federal appellate court does not consider an issue not
passed upon below.” Gilead, 536 F.3d at 1055 (alteration in
original) (quoting Miller v. Thane Int’l, Inc., 519 F.3d 879,
892 (9th Cir. 2008)).

  AFFIRMED IN PART, REVERSED IN PART, and
REMANDED, with the parties to bear their own costs.