Case 1:18-cv-07143-JMF Document 85 Filed 01/04/21 Page 1 of 30
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`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF NEW YORK
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`IN RE:
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`NIELSEN HOLDINGS PLC SECURITIES
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`LITIGATION
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`JESSE M. FURMAN, United States District Judge:
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`18-CV-7143 (JMF)
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`OPINION AND ORDER
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`Plaintiffs in this putative securities-fraud class action — brought pursuant to Sections
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`10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”), 15 U.S.C.
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`§§ 78j(b), 78t(a), and Rule 10b-5 promulgated thereunder, 17 C.F.R. § 240.10b-5 — are
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`investors in Nielsen Holdings plc (“Nielsen”), a publicly traded data analytics company most
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`famous for its television ratings service. Plaintiffs allege that Nielsen and several of its officers,
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`Dwight Mitchell Barns, Jamere Jackson, and Kelly Abcarian (the “Individual Defendants” and,
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`together with Nielsen, “Defendants”) made various false and misleading statements overstating
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`the strength of Nielsen’s business segments. Defendants now move, pursuant to Rule 12(b)(6) of
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`the Federal Rules of Civil Procedure, to dismiss Plaintiffs’ claims. ECF No. 75 (“Motion”). For
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`the reasons that follow, the motion is granted in part and denied in part.
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`BACKGROUND
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`The following facts, drawn from the Second Amended Complaint (the “Complaint”),
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`ECF No. 72 (“SAC”), documents incorporated by reference therein, and mandatory public
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`disclosure documents filed with the SEC, are assumed to be true for purposes of this motion. See
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`DiFolco v. MSNBC Cable L.L.C., 622 F.3d 104, 110-11 (2d Cir. 2010); see also Bd. of Trs. of Ft.
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`Lauderdale Gen. Emps.’ Ret. Sys. v. Mechel OAO, 811 F. Supp. 2d 853, 865 (S.D.N.Y. 2011),
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`aff’d sub nom. Frederick v. Mechel OAO, 475 F. App’x 353 (2d Cir. 2012) (summary order).
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`Case 1:18-cv-07143-JMF Document 85 Filed 01/04/21 Page 2 of 30
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`Nielsen is a data analytics company that provides clients detailed information about
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`consumer preferences. SAC ¶ 61. Nielsen relies on data obtained from third parties such as
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`Facebook and Twitter for many of its products and services. Id. ¶ 2. At all relevant times,
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`Nielsen’s business was broadly divisible into two segments of roughly equivalent size:
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`(1) “Buy,” focused on consumer purchasing measurement and analytics in the Consumer
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`Packaged Goods (“CPG”) space; and (2) “Watch,” focused on media audience measurement and
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`analytics. Id. ¶ 61. The Buy Segment was further subdivided into Developed Markets,
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`consisting of the United States, Canada, Western Europe, Japan, South Korea, and Australia; and
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`Emerging Markets, consisting of Africa, Latin America, Eastern Europe, Russia, China, India,
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`and Southeast Asia. Id. ¶ 69. By contrast, the Watch segment was subdivided by major product
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`offerings: Marketing Effectiveness, Audio, Audience Measurement, and a general corporate sub-
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`segment. Id. ¶ 70. At all relevant times, the Individual Defendants served in key leadership
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`roles at Nielsen: Barns served as Chief Executive Officer and Board Chairman until his
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`resignation at the end of 2018, id. ¶¶ 34, 36, 229; Jackson served as Chief Financial Officer until
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`his resignation in August 2018, id. ¶¶ 37, 268; and Abcarian served as Senior Vice President of
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`Product Leadership, id. ¶ 40.
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`Plaintiffs allege that Defendants made false or misleading statements in SEC filings and
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`during earnings calls and industry conferences over a Class Period spanning from February 11,
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`2016, to July 25, 2018. See id. ¶ 283. The alleged false or misleading statements can be broadly
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`grouped into two categories: statements concerning the Buy Segment and statements concerning
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`the effect of the European Union’s General Data Protection Regulation (“GDPR”) on Nielsen’s
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`Watch Segment:
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`A. Buy Segment Statements
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`Plaintiffs allege that, beginning in 2016, Defendants repeatedly made three kinds of
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`misstatements about Nielsen’s Buy Segment.
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`First, in a February 11, 2016 press release reporting results for the fourth quarter of 2015,
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`Nielsen projected that its Buy Developed Market (“BDM”) segment would report 1.5% to 3.5%
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`growth in BDM revenue. Id. ¶ 81. During an earnings call for the same quarter, Barns told
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`investors that the “buy business continued to strengthen and expand.” Id. ¶ 82. He further noted
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`that Nielsen felt “great about [its] progress and confident about the year ahead.” Id. In the same
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`call, Jackson assured investors that Nielsen’s CPG clients were “pivoting to growth” and that
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`Nielsen viewed the environment as stable and saw its “clients investing in analytics and
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`innovation.” Id. ¶ 83 (emphasis omitted). In Nielsen’s 2016 Form 10-K filed on February 19,
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`2016, however, Barns and Jackson hedged a little, representing that Nielsen’s Buy Segment
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`clients “may” reduce discretionary advertising spending and “may” be less likely to purchase
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`Nielsen’s analytical services, which “would” naturally have an adverse effect on revenue. Id.
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`¶ 368. But from then through September 2016, Barns and Jackson frequently reaffirmed that
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`they “remain[ed] confident in [their] plan to deliver on all of the operational elements that [they]
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`laid out on [the] fourth quarter call.” Id. ¶ 289; see id. ¶¶ 85, 90-91, 293. Contrary to these
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`assertions and projections, however, discretionary spending was actually declining throughout
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`2016. Indeed, on October 25, 2016, Barns and Jackson admitted during an earnings call that they
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`knew discretionary spending had been declining throughout the year, that the decline was
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`permanent, and that it caused BDM revenues to fall 2.5% in the third quarter of 2016. Id.
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`¶¶ 133-48, 413-16; see also id. ¶¶ 136-37, 414 (Barns later admitting that Nielsen had
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`implemented initiatives to address the decline throughout 2016). When this news broke,
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`Nielsen’s stock plummeted nearly 17%. Id. ¶ 367.
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`Second, Barns and Jackson misrepresented the value of Buy Segment goodwill in
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`Nielsen’s Forms 10-K for the years ending December 31, 2016, and December 31, 2017, by
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`making unreasonable and baseless cash flow assumptions that caused Nielsen to report inflated
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`earnings, assets, and capital. Id. ¶¶ 157-58, 187-89, 278-80, 372-411, 456-60. In addition to
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`concealing their model’s faulty assumptions, Barns and Jackson represented to investors that
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`impairment was just a risk that “could” materially affect Nielsen’s financial performance and
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`that the fair value of the Buy Segment’s goodwill exceeded its carrying value “by at least 20%.”
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`Id. ¶¶ 157-58, 373-74, 386, 457. In reality, after the Class Period and after Barns and Jackson
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`left Nielsen, Nielsen recorded a $1.4 billion impairment charge that reduced the value of the Buy
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`Segment’s goodwill by 54%. Id. ¶¶ 279, 460.
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`Third, in 2017 and 2018, Barns and Jackson represented that Nielsen’s Buy Emerging
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`Market (“BEM”) revenue would increase by 8% to 10% in 2018, that business was
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`“exceptionally strong” and “robust,” and that Nielsen “continue[d] to see solid growth from both
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`local clients and multinationals across the emerging markets.” Id. ¶¶ 14, 174-75, 183, 322-23.
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`Barns and Jackson also represented that any revenue execution issues in China that had
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`contributed to lower revenue than projected for the fourth quarter of 2017 had been resolved and
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`that the Chinese Buy market was “very healthy,” with “tremendous growth opportunities.” Id.
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`¶¶ 333-34, 348. In actuality, Nielsen’s BEM clients were significantly reducing spending
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`throughout 2018, particularly in China and Southeast Asia, and the revenue execution issues
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`were ongoing. Id. ¶ 184, 238, 274.
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`B. GDPR-Related Statements
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`Plaintiffs also allege false or misleading statements about the effect of GDPR on
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`Nielsen’s ability to acquire data from providers such as Facebook. GDPR, a sweeping data
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`privacy regulation adopted in April 2016, and effective on May 25, 2018, created a system of
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`rules restricting the use of personal data. Id. ¶¶ 16, 202, 204, 206. Among other things, it
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`requires “the consent of those whose data is being used” and “the anonymization of certain
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`collected data to protect privacy prior to the processing of that data.” Id. ¶ 202. It also includes
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`“provisions regarding data breach notifications[] and rules regarding establishing policies for
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`ensuring the safe handling of data across borders.” Id. Prior to its enactment, the legislation was
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`heavily scrutinized for its likely adverse effect on the data collecting industry. See id. ¶¶ 204-05.
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`Nevertheless, leading up to its enactment, Nielsen’s senior officials repeatedly assured the public
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`that Nielsen was ready for the regulation and that it would be a “non-event.” Id. ¶ 18. Barns and
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`Abcarian continued to make these assurances even after GDPR went into effect, further
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`representing that Nielsen had access to all of the data it would need for its products. Id. ¶¶ 16,
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`214-19. On September 12, 2018, however, Megan Clarken, then the President of Product
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`Leadership, revealed that, on the day GDPR was enacted, Nielsen’s clients cut the company’s
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`access to their data, shutting off 120 of Nielsen’s campaigns and raising doubts with respect to
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`the truth of Nielsen’s past assurances. Id. ¶ 270.
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`LEGAL STANDARDS
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`In reviewing a motion to dismiss pursuant to Rule 12(b)(6), a court must accept the
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`factual allegations set forth in the complaint as true and draw all reasonable inferences in favor
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`of the plaintiff. See, e.g., Cohen v. Avanade, Inc., 874 F. Supp. 2d 315, 319 (S.D.N.Y. 2012).
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`The Court will not dismiss claims unless Plaintiffs have failed to plead sufficient facts to state a
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`claim to relief that is facially plausible, see Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570
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`(2007), that is, one that contains “factual content that allows the court to draw the reasonable
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`inference that the defendant is liable for the misconduct alleged,” Ashcroft v. Iqbal, 556 U.S.
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`662, 678 (2009). More specifically, Plaintiffs must allege facts showing “more than a sheer
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`possibility that a defendant has acted unlawfully.” Id. A complaint that offers only “labels and
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`conclusions” or “a formulaic recitation of the elements of a cause of action will not do.”
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`Twombly, 550 U.S. at 555. If Plaintiffs have not “nudged their claims across the line from
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`conceivable to plausible, [those claims] must be dismissed.” Id. at 570.
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`Because Plaintiffs in this case allege securities fraud, they must also satisfy the
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`heightened pleading requirements of both Rule 9(b), which requires that the circumstances
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`constituting fraud be “state[d] with particularity,” Fed. R. Civ. P. 9(b), and the Private Securities
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`Litigation Reform Act (“PSLRA”), 15 U.S.C. § 78u-4(b), which requires that scienter — that is,
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`a defendant’s “intention to deceive, manipulate, or defraud” — also be pleaded with
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`particularity, Tellabs, Inc. v. Makor Issues & Rts., Ltd., 551 U.S. 308, 313 (2007) (internal
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`quotation marks omitted). To satisfy Rule 9(b), a plaintiff generally “must ‘(1) specify the
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`statements that the plaintiff contends were fraudulent, (2) identify the speaker, (3) state where
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`and when the statements were made, and (4) explain why the statements were fraudulent.’”
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`Anschutz Corp. v. Merrill Lynch & Co., 690 F.3d 98, 108 (2d Cir. 2012) (quoting Rombach v.
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`Chang, 355 F.3d 164, 170 (2d Cir. 2004)). To satisfy the PSLRA, a complaint must, “with
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`respect to each act or omission alleged to [constitute securities fraud], state with particularity
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`facts giving rise to a strong inference that the defendant acted with the required state of mind.”
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`ATSI Commc’ns, Inc. v. Shaar Fund, Ltd., 493 F.3d 87, 99 (2d Cir. 2007) (quoting 15 U.S.C.
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`§ 78u-4(b)(2)(A)). A plaintiff may do so by “alleging facts (1) showing that the defendants had
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`both motive and opportunity to commit the fraud or (2) constituting strong circumstantial
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`evidence of conscious misbehavior or recklessness.” Id. For an inference of scienter to be
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`“strong,” a reasonable person must deem the inference “cogent and at least as compelling as any
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`opposing inference one could draw from the facts alleged.” Tellabs, 551 U.S. at 324.
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`DISCUSSION
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`As noted, Plaintiffs bring claims under Sections 10(b) and 20(a) of the Exchange Act and
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`SEC Rule 10b-5. To state a claim that Defendants made material misrepresentations or
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`omissions in violation of Section 10(b) and Rule 10b-5, Plaintiffs must allege “(1) a material
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`misrepresentation or omission by the defendant; (2) scienter; (3) a connection between the
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`misrepresentation or omission and the purchase or sale of a security; (4) reliance upon the
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`misrepresentation or omission; (5) economic loss; and (6) loss causation.” Matrixx Initiatives,
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`Inc. v. Siracusano, 563 U.S. 27, 37-38 (2011) (internal quotation marks omitted); see IBEW
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`Local Union No. 58 Pension Tr. Fund & Annuity Fund v. Royal Bank of Scot. Grp., PLC, 783
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`F.3d 383, 389 (2d Cir. 2015). To state a claim under Rule 20(a), Plaintiffs must, at a minimum,
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`plead a plausible “primary violation” of Section 10(b). See, e.g., SEC v. First Jersey Sec., Inc.,
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`101 F.3d 1450, 1472 (2d Cir. 1996); Total Equity Cap., LLC v. Flurry, Inc., No. 15-CV-4168
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`(JMF), 2016 WL 3093993, at *2 (S.D.N.Y. June 1, 2016).
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`Applying these standards, the Court concludes that some of Plaintiffs’ claims survive
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`Defendants’ motion and some do not. The Court will begin with Defendants’ alleged
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`misstatements and omissions about the Buy Segment — (1) the projected growth of the BDM
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`business in 2016 and 2017; (2) the fair value of Buy Segment goodwill in 2017 and 2018; and
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`(3) the strength of the BEM business in 2017 and 2018 — and then turn to their statements about
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`the effects of GDPR on Nielsen’s Watch Marketing Effectiveness (“WME”) Segment in 2018.
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`A. Projected Growth of the BDM Business in 2016 and 2017
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`The Court begins with Plaintiffs’ allegations regarding Defendants’ BDM-related
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`statements in 2016 and 2017. Plaintiffs point to a series of press releases and earnings calls in
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`which Defendants assured investors that the BDM was “stable” and projected to see 1.5% to
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`3.5% growth in revenue in 2016. See SAC ¶¶ 81-82, 285-87; id. ¶¶ 85-86 (Barns and Jackson on
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`April 20, 2016, reaffirming that the BDM business remained “solid” and that “discretionary
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`spend remained stable with relative strength in areas like innovation”); id. ¶¶ 90-91, 295-96
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`(Barns and Jackson on July 26, 2016, reaffirming that they “remain[ed] confident in our plan to
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`deliver on all of the operational elements that we laid out at the beginning of the year” and that it
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`was “not uncommon to see these [lumpy] dynamics from time to time”); id. ¶ 298 (Barns on
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`September 26, 2016, at a conference stating that “clients prefer real-time analytics . . . over more
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`bespoke solutions” and that Nielsen’s “most important initiative” — the Connected Buy system
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`— would “expand [Nielsen’s] margins”). Nielsen’s initial forecast and later reaffirmations were
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`untenable, Plaintiffs allege, because senior management knew as early as 2015 that it was the
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`“new norm” for Nielsen’s CPG clients to reduce their discretionary spending on Nielsen’s
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`analytical services, preferring instead to buy only “real-time data” and run their own analyses.
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`Id. ¶¶ 94, 97-100. Because discretionary spending constituted 30% of total revenue, Defendants
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`knew this decline would have a negative impact on its BDM business and misled investors with
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`optimistic statements and by failing to disclose the trend. Id. ¶ 127.
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`Broadly speaking, Plaintiffs’ claims relating to these allegations are premised on two
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`distinct theories: first, that Defendants failed to disclose in Nielsen’s 2016 Form 10-K and 10-Qs
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`that discretionary spending was trending downward as a result of its clients’ lack of interest in
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`the company’s analytics offerings, in violation of Item 303 of SEC Regulation S-K (“Item 303”),
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`17 C.F.R. § 229.303; and second, that Defendants made materially misleading revenue forecasts
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`and other statements about the stability of the BDM business from 2016 to 2017. SAC ¶¶ 140-
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`142; 364-69. With respect to the former, Defendants do not dispute that Plaintiffs adequately
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`allege that discretionary spending was on the decline. Instead, they argue that Plaintiffs fail to
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`plead “management’s knowledge of that trend.” ECF No. 76 (“Defs.’ Mem.”), at 25. With
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`respect to the remaining BDM-related statements, Defendants primarily argue that Plaintiffs fail
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`to plead scienter because they rely on “generic claims of corporate knowledge made” by
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`unreliable cooperating witnesses, id. at 14, and because Barns’s and Jackson’s departures were
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`not motivated by fraud, id. at 19. Defendants also contend that Plaintiffs fail to plausibly plead
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`falsity on the ground that they do not explain “how the statements were false or misleading,” id.
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`at 22, and merely rely on the unreliable confidential witnesses, Nielsen’s later disclosures, id. at
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`23, and forward-looking statements that were accompanied by cautionary language, id. at 27-28.
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`The Court addresses each set of allegations in turn.
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`1. Item 303 Claims
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`Item 303 requires corporate entities to “[d]escribe any known trends or uncertainties . . .
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`that the registrant reasonably expects will have a material . . . unfavorable impact on
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`. . . revenues or income from continuing operations.” 17 C.F.R. § 229.303(a)(3)(ii). “[A] failure
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`to make a required Item 303 disclosure in a 10-Q filing is indeed an omission that can serve as
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`the basis for a Section 10(b) securities fraud claim. However, such an omission is actionable
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`only if it satisfies the materiality requirements outlined in Basic Inc. v. Levinson, 485 U.S. 224
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`(1988), and if all of the other requirements to sustain an action under Section 10(b) are fulfilled.”
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`Stratte-McClure v. Morgan Stanley, 776 F.3d 94, 100 (2d Cir. 2015). “Information is material if
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`there is a substantial likelihood that the disclosure of the omitted fact would have been viewed by
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`the reasonable investor as having significantly altered the total mix of information made
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`available.” In re Scholastic Corp. Sec. Litig., 252 F.3d 63, 76 (2d Cir. 2001) (internal quotation
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`marks omitted); see id. (finding that information regarding book returns was adequately alleged
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`to be material where defendant’s stock rating was boosted in response to misleading
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`representations and analysts’ response was sharply critical once information was released).
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`For purposes of this motion, Defendants do not dispute that, during the Class Period,
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`Nielsen faced a downward trend in its clients’ discretionary spending. Nor do they — or could
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`they — argue that their SEC filings prior to September 2016 adequately disclosed the trend or
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`that the trend had a material, adverse impact on Nielsen’s revenues. See Defs.’ Mem. 25-26;
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`ECF No. 84 (“Reply”), at 1-10. Instead, Defendants hang their hat on scienter, arguing that
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`Plaintiffs, in relying on the testimony of confidential witnesses, fail to sufficiently allege that
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`management knew of the trend in 2016. See Defs.’ Mem. 25-26. But that argument disregards
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`Defendants’ own admissions. Most notable is the October 25, 2016 earnings call, during which
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`Barns stated:
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`Earlier this year, as we saw these more challenging trends unfolding, we
`realigned our Buy business to be more focused in our product development and
`more efficient in our overhead. More recently as the trends continued for our
`clients, we stepped up our efforts to reduce our cost base, reallocate resources and
`accelerate our investments in initiatives that will help our clients and better
`position our business for the future.
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`SAC ¶ 136 (emphases added); ECF No. 80 (“Opp’n”), at 17. During the same call, Jackson also
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`acknowledged they “ha[d] not seen [a strong discretionary environment] since [the fourth quarter
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`of 2015].” SAC ¶ 145; see id. at 47 n.18; see also id. ¶ 91(describing a July 26, 2016 earnings
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`call during which Jackson and Barns attributed the below-guidance results in the second quarter
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`of 2016 to “softer discretionary spend,” suggesting access to such information).
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`Drawing all inferences in Plaintiffs’ favor, as the Court must, these statements provide a
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`basis to conclude that Barns and Jackson knew that Nielsen’s clients were decreasing their
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`discretionary spending throughout 2016 to a degree that warranted a change in business
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`practices. See, e.g., Rolf v. Blyth, Eastman Dillon & Co., 570 F.2d 38, 47 (2d Cir. 1978)
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`(explaining that for conduct to qualify as reckless, it must have been “highly unreasonable” and
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`“an extreme departure from the standards of ordinary care . . . to the extent that the danger was
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`either known to the defendant or so obvious that the defendant must have been aware of it”
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`(alteration in original)). More specifically, it cannot be said that, by the beginning of the third
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`quarter of 2016, Defendants were merely in the process of assessing the risk because they
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`actively responded to the trend by implementing internal changes, for instance by shifting the
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`Buy Segment’s business and operations to focus on product development. See SAC ¶¶ 136, 414;
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`see also, e.g., In re Scholastic, 252 F.3d at 73 (considering the defendant’s shift to “engag[ing] in
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`aggressive sales practices during the second and third quarters of its 1996-97 fiscal year” as
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`supporting an inference “that company sales officials were aware of declining sales and
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`increasing returns”). Thus, this is not a case in which the Complaint is wholly “silent about
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`when the employees realized that the more pessimistic assessments of the market were likely to
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`come to fruition.” Stratte-McClure, 776 F.3d at 107. To the contrary, taken together, these
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`allegations are sufficient to suggest that Barns and Jackson knew about the adverse trend in
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`2016, yet did not timely disclose it to the public in Nielsen’s July 2016 Form 10-Q or any
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`subsequent Form filed with the SEC during the Class Period. See SAC ¶ 366.
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`That said, the Complaint does not adequately allege that Defendants were aware of the
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`trend in 2015 or in the first quarter of 2016 — that is, when they filed the company’s 2016 Form
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`10-K or April 2016 Form 10-Q. In his October 25, 2016 statement, Barns admitted that
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`Defendants had seen the trend unfold “[e]arlier this year,” meaning in 2016; he said little about
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`what they knew in 2015. To be sure, Barns also stated that Defendants “saw the trend starting to
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`emerge” in 2015, at least with respect to “small and medium sized [food and beverage]
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`manufacturers.” SAC ¶ 143. But given that Nielsen experienced 4.8% growth in BDM revenue
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`in the fourth quarter of 2015 by presumably relying on its classic business model, see SAC 47
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`n.18, and 2.0% growth in BDM revenue in the first quarter of 2016, see April 2016 Form 10-Q,
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`at 29, the “most cogent inference” from these allegations “is that [Nielsen] delayed releasing
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`information on its [2016 Form 10-K and April 2016 Form 10-Q] to carefully review all of the
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`relevant evidence and was at worst negligent as to the effect of the delay on investors.” Stratte-
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`McClure, 776 F.3d at 107 (internal quotation marks omitted); see also Matrixx Initiatives, Inc.,
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`563 U.S. at 49 n.15. “Because ‘a reasonable person’ would not deem the inference that [Nielsen]
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`was consciously reckless about whether its mandated filings would mislead investors ‘at least as
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`compelling’ as this opposing inference,” Stratte-McClure, 776 F.3d at 107 (quoting Tellabs, 551
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`U.S. at 324), Plaintiffs do not adequately plead scienter with respect to their Item 303 claims
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`based on the 2016 Form 10-K and April 2016 Form 10-Q.1
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`The only other allegations Plaintiffs point to as evidence of Defendants’ knowledge in
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`2015 come from confidential witnesses who were formerly employed by Nielsen, but these
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`allegations do not satisfy the heightened pleading standards of Rule 9(b) and the PSLRA. A
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`plaintiff may rely on confidential witnesses so long as allegations in the complaint are sufficient
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`to “provide an adequate basis for believing that the defendants’ statements were false.” Novak v.
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`For similar reasons, Plaintiffs do not adequately establish that the 2016 Form 10-K’s
`general warning about discretionary spending was misleading, as it is not clear from the
`Complaint that the trend had fully materialized in 2015. Instead, “the allegations in the
`complaint are consistent with unremarkable circumstances short of financial peril or instability.”
`Rombach, 355 F.3d at 173-74.
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`Kasaks, 216 F.3d 300, 314 (2d Cir. 2000). That is, “confidential source allegations must show
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`that individual defendants actually possessed the knowledge highlighting the falsity of public
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`statements; conclusory statements that defendants ‘were aware’ of certain information, and mere
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`allegations that defendants ‘would have’ or ‘should have’ had such knowledge is insufficient.”
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`Glaser v. The9, Ltd., 772 F. Supp. 2d 573, 591 (S.D.N.Y. 2011) (emphasis added). Here, one
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`confidential witness — a former Vice President in Nielsen’s U.S. Consumer & Shopper Insights
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`business identified in the Complaint as “CW1” — claims that “weekly reports from the finance
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`department containing metrics such as detailed revenues and budget breakdowns by each client”
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`were “received” by “all client service leaders . . . from Vice Presidents all the way up to CEO
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`Barns.” SAC ¶ 117. He also claims that “upper management, including . . . Barns, would have
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`quarterly meetings at a minimum where client budgets and revenues were discussed in depth.”
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`Id. Other confidential witnesses describe how the financial data was kept on Nielsen’s servers
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`and made accessible to the senior officials. See SAC ¶¶ 94-132, 417. But such general musings
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`about information to which corporate officials had access do not suffice. See, e.g., Shetty v.
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`Trivago N.V., 796 F. App’x 31, 35 (2d Cir. 2019); see also, e.g., Local No. 38 Int’l Bhd. of Elec.
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`Workers Pension Fund v. Am. Express Co., 724 F. Supp. 2d 447, 461-62 (S.D.N.Y. 2010)
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`(“Notably, these [confidential witness] allegations do not establish what specific contradictory
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`information the Individual Defendants received or when they received it. . . . Indeed, if
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`‘detailed’ reports were circulated regularly among AMEX’s senior management, [the
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`confidential witness] should be able to identify the names and contents of these documents, or
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`recount specific meetings at which the Individual Defendants actually received contradictory
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`information. . . . [B]land assertions that they ‘would have received’ such information offer
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`nothing concrete and are not allegations of fact.”). Thus, Plaintiffs’ allegations do not suffice to
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`show that Defendants actually possessed knowledge about the trend in 2015.
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`Accordingly, to the extent that Plaintiffs allege an Item 303 violation with respect to
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`Nielsen’s 2016 Form 10-K and April 2016 Form 10-Q based on a failure to disclose a downward
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`trend in discretionary spending, see SAC ¶ 364, Defendants’ motion is granted and such claims
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`are dismissed. By contrast, Defendants’ motion is denied with respect to Plaintiffs’ claim that
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`Defendants failed to disclose the trend in Nielsen’s July 2016 Form 10-Q and thereafter.
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`2. Statements About the Strength and Stability of the BDM Business
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`For similar reasons, the Court concludes that some, but not all, of Plaintiffs’ claims with
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`respect to Defendants’ statements concerning the strength and stability of the BDM business
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`survive. Nielsen’s BDM revenue growth steadily declined from 4.8% growth in the fourth
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`quarter of 2015, to 2.0% growth in the first quarter of 2016, to 0.9% growth in the second
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`quarter, to a 2.5% decrease in the third quarter of 2016. Id. ¶¶ 47 n.18, 91, 419; April 2016
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`Form 10-Q. And as previously discussed, Plaintiffs plausibly allege that Defendants were aware
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`of the trend by the beginning of the third quarter of 2016. In light of these allegations, Plaintiffs
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`state plausible claims with respect to Defendants’ statements in July 2016 about the strength and
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`stability of their BDM business. See, e.g., SAC ¶¶ 295-96 (downplaying the softer spending,
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`stating “discretionary spending can be a little lumpy” and that it was “not uncommon to see these
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`dynamics from time to time”); see also, e.g., In re Scholastic, 252 F.3d at 70 (finding sufficient
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`allegations that the defendants reported “constant” sales and “strong” performance shortly before
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`announcing expected losses); Novak, 216 F.3d at 312-13 (finding that specific factual allegations
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`regarding the defendants’ writing off inventory were sufficient to support a claim “that the
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`defendants’ positive public statements concerning inventory growth were false and misleading”).
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`By contrast, Defendants’ earlier affirmations — in the 2016 Form 10-K, the April 2016
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`Form 10-Q, and earnings calls — are not actionable because the Complaint does not plausibly
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`allege that the downward trend had taken root by then, that Defendants omitted facts that
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`rendered their statements of opinion misleading, or that Defendants did not believe their
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`optimistic statements. See, e.g., id. ¶¶ 85, 289 (Barns and Jackson stating, in an earnings call for
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`the first quarter of 2016, that they “remain[ed] confident in our plan to deliver on all of the
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`operational elements that we laid out on [the] fourth quarter call”), id. ¶ 291(a)-(b) (Barns
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`stating, in the same call, that “2016 is off to a good start for Nielsen, underpinned by our
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`consistent resilient business model,” and that, “[i]n the developed markets, our core
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`measurement business was solid in our two largest markets, the US and Western Europe.”); id.
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`¶ 291(c) (press release for the first quarter of 2016 stating that “Nielsen’s strong first quarter
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`results were underpinned by our steady and resilient business model” and that its “unparalleled
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`global footprint remains a core competitive advantage for both local and multinational clients”).
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`“In the absence of particularized allegations that [the company] was experiencing or internally
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`predicting” growth materially less than its projections, “the subsequent disclosures” alone
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`“provide no basis to conclude that Defendants recklessly misstated” the strength of the business.
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`In re Wachovia Equity Sec. Litig., 753 F. Supp. 2d 326, 362 (S.D.N.Y. 2011). Along similar
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`lines, Plaintiffs do not allege facts sufficient to suggest that Barns’s September 26, 2016
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`statement that “Connected Buy will expand [Nielsen’s] margins,” SAC ¶ 298, or that any of
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`Defendants’ BDM-related statements in 2017, id. ¶¶ 308-330, were false or misleading. That is
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`particularly true in the latter case given that, in October 2016, Defendants acknowledged that
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`they viewed the decline in discretionary spending as a secular shift. Id. ¶ 145-46.
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`3. BDM Revenue Forecasts
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`By contrast, all of Defendants’ BDM-related forecasts in 2016 and 2017 are inactionable.
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`Revenue forecast