Zhong Zheng v. Pingtan Marine Enter. Ltd., 379 F.Supp.3d 164, 175 (E.D.N.Y. 2019) (citing Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)) (cleaned up). A complaint must contain sufficient “factual content,” generally accepted as true, to allow the Court to “draw the reasonable inference that the defendant is liable for the misconduct alleged.” Brooklyn Union Gas Co. v. Exxon Mobil Corp., 554 F.Supp.3d 448, 457 (E.D.N.Y. 2021) (quoting Matson v. Bd. of Educ., 631 F.3d 57, 63 (2d Cir. 2011)).
” Zheng v. Pingtan Marine Enter., 379 F.Supp.3d 164, 181 (E.D.N.Y. 2019) (collecting cases). “Indeed, ‘these certifications typically add nothing substantial to the scienter calculus because allowing Sarbanes-Oxley certifications to create an inference in every case would eviscerate the pleading requirements for scienter set forth in the PSLRA.'” Id. (quoting Reilly, 2018 WL 3559089, at *19); Int'l Ass'n of Heat v. Int'l Bus. Machines Corp., 205 F.Supp.3d 527, 536 (S.D.N.Y. 2016) (similar).
arises that high-level officers and directors had knowledge of those facts based on their positions within the company." Zhong Zheng v. Pingtan Marine Enterprise Ltd., 379 F. Supp. 3d 164, 181 (E.D.N.Y. 2019) (citation omitted). This doctrine typically applies where "the operation in question constitute[s] nearly all of a company's business."
As a threshold matter, there is considerable question in this circuit as to whether the core operations doctrine survived the enactment of the PSLRA. See Zhong Zheng v. Pingtan Marine Enter. Ltd., 379 F.Supp.3d 164, 181 (E.D.N.Y. 2019) (citing In re Barrick Gold Corp. Sec. Litig., 341 F.Supp.3d 358, 374 (S.D.N.Y. 2018)). In any event, “the majority rule is to consider the core operations allegations to constitute supplementary, but not an independent means to plead scienter.
Ltd., 195 F. Supp. 3d 489, 496 (S.D.N.Y. 2016); Zhong Zheng v. Pingtan Marine Enter. Ltd., 379 F. Supp. 3d 164, 177-79 (E.D.N.Y. 2019). This is an application of the more general principle that loss causation, when alleged through a corrective disclosure, requires that previously non-public information be revealed.
(S.D.N.Y. 2015) (emphasis added) (finding that the complaint failed to allege that short seller's report was a corrective disclosure); Zhong Zheng v. Pingtan Marine Enter. Ltd., 379 F.Supp.3d 164, 178 (E.D.N.Y. 2019) (finding that plaintiff failed to plead loss causation because short-seller report “did not reveal any undisclosed information” and “relied on public information” to form an opinion about the value of the shares).
The "core operations doctrine" provides that plaintiffs who "plead that a defendant made false or misleading statements when contradictory facts of critical importance to the company either were apparent, or should have been apparent" can rely on "an inference . . . that high-level officers and directors had knowledge of those facts by virtue of their positions within the company." Zhgjjg v. Pingtan Marine Enter. Ltd.. 379 F.Supp.3d 164, 181 (E.D.N.Y. 2019). "The Second Circuit has not expressly determined if the 'core operations' doctrine remains applicable to provide scienter after the enactment of the PSLRA."
“The plausibility standard does not require detailed factual allegations, but it demands more than unadorned, the-defendant-unlawfully-harmed-me accusations.” Zhong Zheng v. Pingtan Marine Enter. Ltd., 379 F.Supp.3d 164, 175 (E.D.N.Y. 2019) (citing Iqbal, 556 U.S. at 678 (cleaned up))
"A negative journalistic characterization of previously disclosed facts does not constitute a corrective disclosure of anything but the journalists' opinions." Zhong Zheng v. Pingtan Marine Enter. Ltd., 379 F.Supp.3d 164, 177 (E.D.N.Y. 2019). The J Capital and Hindenberg reports were not corrective disclosures.
Accordingly, “courts in this circuit regularly hold that the signing of a SOX certification, without more, is insufficient to plead scienter.” Zheng v. Pingtan Marine Enter., 379 F.Supp.3d 164, 181 (E.D.N.Y. 2019) (collecting cases)