US District Court Judge Robert Aguilar has struck a fine blow for justice in dismissing with a summary judgement the three-and-a-half year-old $120m class action lawsuit against Cypress Semiconductor Corp, concluding his order The short of the matter is this: Cypress had two disappointing quarters in late 1991 and early 1992. As a result, its stock price dropped. Plaintiffs argue that Cypress should have known what was coming and should have disclosed it. But the evidence shows that the problems underlying Cypress’s poor performance were unexpected and that Cypress did not know and had no reason to know that it would not make its forecasts. Plaintiffs’ entire case is based on hindsight, forgetting that the securities laws do not adopt this perspective. As F rederic William Maitland put it, ‘it is very difficult to remember that events now in the past were once far in the future.’ All of Cypress’s forward-looking statements had a reasonable basis at the time they were made, which is the only time that matters as far as the securities laws are concerned. No reasonable jury could find that any of Cypress’s statements were false or misleading. Given this conclusion, the Court need not reach the issues of scienter or the individual defendants’ liability. Defendants’ motion for summary judgment is granted in its entirety. It is so ordered. Cypress says it fought the suit and intends to defend any appeal rather than negotiate a settlement and pay protection money.
