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`Case 3:19-cv-02356-S Document 62 Filed 07/11/21 Page 1 of 16 PageID 2064Case 3:19-cv-02356-S Document 62 Filed 07/11/21 Page 1 of 16 PageID 2064
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE NORTHERN DISTRICT OF TEXAS
`DALLAS DIVISION
`
`Civil Action No. 3:19-cv-2356
`
`§§§§§§§§§§§§
`
`§
`
`
`
`Plaintiff,
`
`PHILLIP R. CRUTCHFIELD, Individually
`and On Behalf of All Others Similarly
`Situated,
`
`
`
`v.
`
`MATCH GROUP, INC., AMANDA W.
`GINSBERG AND GARY SWIDLER,
`
`
`
`Defendants.
`
`DEFENDANTS’ REPLY IN SUPPORT OF MOTION TO DISMISS
`SECOND AMENDED COMPLAINT
`
`
`
`
`
`
`
`

`

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`TABLE OF CONTENTS
`
`
`
`Page(s)
`
`
`INTRODUCTION ......................................................................................................................... 1
`
`ARGUMENT AND AUTHORITIES ............................................................................................ 2
`
`I.
`
`
`II.
`
`THE “NEW” ALLEGATIONS DO NOT SHOW FALSITY OR SUPPORT A
`STRONG INFERENCE OF SCIENTER .......................................................................... 2
`
`PLAINTIFFS’ NEW EXHIBITS ONLY FURTHER SUPPORT DISMISSAL ............... 8
`
`III.
`
`THE GINSBERG INTERVIEW DOES NOT SUPPORT A CLAIM .............................. 9
`
`CONCLUSION AND PRAYER FOR RELIEF .......................................................................... 10
`
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`TABLE OF AUTHORITIES
`
`
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`Page(s)
`
`Cases
`Abrams v. Baker Hughes Inc.,
`292 F.3d 424 (5th Cir. 2002) .....................................................................................................6
`In re Administaff, Inc. Secs. Litig.,
`2006 WL 846378 (S.D. Tex. Mar. 30, 2006) .............................................................................2
`Alaska Elec. Pens. Fnd. v. Flotek Indus., Inc.,
`915 F.3d 975 (5th Cir. 2019) .....................................................................................................2
`Bodri v. GoPro, Inc.,
`252 F. Supp. 3d 912 (N.D. Cal. 2017) .....................................................................................10
`Callinan v. Lexicon Pharms., Inc.,
`479 F. Supp. 3d 379 (S.D. Tex. 2020) .....................................................................................10
`Chun v. Fluor Corp.,
`2021 WL 1788626 (N.D. Tex. May 5, 2021) ........................................................................1, 2
`In re Cobalt Energy, Inc.,
`2016 WL 215476 (S.D. Tex. Jan. 19, 2016) ..............................................................................7
`Fin. Acquisition Partners LP v. Blackwell,
`440 F.3d 278 (5th Cir. 2006) .....................................................................................................1
`FindWhat Inv. Grp. v. FindWhat.com,
`658 F.3d 1282 (11th Cir. 2011) ...............................................................................................10
`Flaherty & Crumrine Preferred Income Fund, Inc. v. TXU Corp.,
`565 F.3d 200 (5th Cir. 2009) .....................................................................................................6
`In re Franklin Bank Corp. Secs. Litig.,
`782 F. Supp. 2d 364 (S.D. Tex. Mar. 21, 2011) ......................................................................10
`Hall v. Rent-A-Center, Inc.,
`2017 WL 6398742 (E.D. Tex. Oct. 19, 2017) ...........................................................................7
`Hamano v. Activision Blizzard, Inc.,
`2019 WL 7882076 (C.D. Cal. Oct. 17, 2019) ..........................................................................10
`Heck v. Orion Grp. Holdings, Inc.,
`468 F. Supp. 3d 828 (S.D. Tex. 2020) .......................................................................................2
`Heinze v. Tesco Corp.,
`971 F.3d 475 (5th Cir. 2020) .................................................................................................2, 5
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`Ind. Elec. Workers’ Pens. Tr. Fnd. IBEW v. Shaw Grp.,
`537 F.3d 527 (5th Cir. 2008) .....................................................................................................5
`In re Integrated Elec. Servs., Inc. Secs. Litig.,
`2006 WL 54021 (S.D. Tex. Jan. 10, 2006), aff’d, 497 F.3d 546 (5th Cir. 2007) ......................2
`Iron Workers Benefit and Pension Fund v. Anadarko Petroleum Corp.,
`788 F. App’x 268 (5th Cir. 2019) ..............................................................................................6
`Kakkar v. Bellicum Pharms., Inc.,
`2020 WL 2845279 (S.D. Tex. May 29, 2020) .......................................................................2, 6
`In re KBR, Inc. Secs. Litig.,
`2018 WL 4208681 (S.D. Tex. Aug. 31, 2018) ..........................................................................5
`Lormand v. US Unwired, Inc.,
`565 F.3d 228 (5th Cir. 2009) .....................................................................................................7
`Marcus v. J.C. Penney Co., Inc.,
`2015 WL 5766870 (E.D. Tex. Sept. 29, 2015) ..........................................................................7
`Oppenheim Pramerica Asset Mgmt. S.A.R.L. v. Encysive Pharms., Inc.,
`2007 WL 2720074 (S.D. Tex. Sept. 18, 2007) ..........................................................................2
`Parker v. Hyperdynamics Corp.,
`2015 WL 5024027 (S.D. Tex. Aug. 25, 2015) ..........................................................................2
`Perez v. Higher One Holdings, Inc..,
`2017 WL 4246775 (D. Conn. Sept. 25, 2017) ...........................................................................7
`Ramirez v. Exxon Mobil Corp.,
`334 F. Supp. 3d 832 (N.D. Tex. 2018) ......................................................................................7
`Rosenzweig v. Azurix Corp.,
`332 F.3d 854 (5th Cir. 2003) .....................................................................................................6
`In re SeeBeyond Techs. Corp. Secs. Litig.
`266 F. Supp. 2d 1150 (C.D. Cal. 2003) .....................................................................................7
`Smallen v. Western Union Co.,
`No. 17-cv-00474, 2019 WL 1382823 (D. Colo. Mar. 27, 2019), aff’d, 950
`F.3d 1297 (10th Cir. 2020) ........................................................................................................9
`Southland Sec. Corp. v. INSpire Ins. Sols., Inc.,
`365 F.3d 353 (5th Cir. 2004) .....................................................................................................6
`Spitzberg v. Houston Am. Energy Corp.,
`758 F.3d 676 (5th Cir. 2014) .....................................................................................................7
`Stephens v. Uranium Energy Corp.,
`2016 WL 3855860 (S.D. Tex. July 15, 2016) ............................................................................2
`Stockman v. Flotek Indus., Inc.,
`2010 WL 3785586 (S.D. Tex. Sept. 29, 2010) ..........................................................................2
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`In re SunEdison, Inc. Secs. Litig.,
`300 F. Supp. 3d 444 (S.D.N.Y. 2018) ........................................................................................7
`Stone v. Life Partners Holdings, Inc.,
`26 F. Supp. 3d 575 (W.D. Tex. 2014) ........................................................................................7
`Tellabs, Inc. v. Makor Issues & Rights, Ltd.,
`551 U.S. 308 (2007) .........................................................................................................3, 9, 10
`Town of Davie Pens. Plan v. Pier 1 Imports, Inc.,
`325 F. Supp. 3d 728 (N.D. Tex. 2018) (Scholer, J.) ..................................................................1
`Wade v. WellPoint, Inc.,
`892 F. Supp. 2d 1102 (S.D. Ind. Aug. 31, 2012) .....................................................................10
`Wieland v. Stone Energy Corp.,
`2007 WL 2903178 (W.D. La. Aug. 17, 2007) ...........................................................................7
`Rules and Statutes
`Fed. R. Civ. P. 12 .......................................................................................................................8, 10
`Private Securities Litigation Reform Act .........................................................................................1
`SEC Rule 10b-5 ...........................................................................................................................2, 5
`SEC Rule 14a-9 ................................................................................................................................5
`
`
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`INTRODUCTION
`
`The Opposition confirms that it is time to dismiss this case with prejudice. Plaintiffs do
`
`not and cannot explain how their paltry additions to the prior complaint1 demonstrate the falsity of
`
`any disclosure or establish that any individual Defendant personally knew of facts contradicting
`
`their statements, which must be pled with particularity to establish scienter against Match Group.
`
`Instead of identifying cogent and compelling new allegations, Plaintiffs’ Opposition replows acres
`
`of old ground while citing readily distinguishable authorities that only serve to underscore the
`
`types of critical particularized facts required to survive dismissal that have not been pled here.
`
`Having been afforded the opportunity to file a second amended complaint, and having
`
`come nowhere close to curing any (let alone all) of the numerous deficiencies in the prior amended
`
`complaint, further leave to amend should be denied.2 Plaintiffs fail to cite any examples where a
`
`district court within this circuit allowed a third amended complaint in a securities class action after
`
`the first two (including the initial complaint and the consolidated complaint after selection of lead
`
`plaintiffs) failed to satisfy the PSLRA. Indeed, securities plaintiffs in this circuit often do not get
`
`
`1 Tellingly, not only did Plaintiffs fail to provide a courtesy redline copy of their amended pleading
`so that the Court could easily see the supposedly compelling new allegations, but Plaintiffs have
`actually objected to Defendants’ submission of a redline. If the new allegations actually moved
`the needle, one would expect Plaintiffs to go out of their way to highlight this material for the
`Court, rather than trying to obscure it through meritless objections. The objection lacks merit in
`any event, as Plaintiffs do not specifically assert the exhibit is inaccurate.
`2 See Town of Davie Pens. Plan v. Pier 1 Imports, Inc., 325 F. Supp. 3d 728, 749 (N.D. Tex. 2018)
`(Scholer, J.) (denying further leave to amend where, like here, securities plaintiff was afforded
`opportunity to amend after dismissal of initial consolidated complaint, and amended complaint
`again failed to satisfy PSLRA); Fin. Acquisition Partners LP v. Blackwell, 440 F.3d 278, 291 (5th
`Cir. 2006) (affirming denial of leave to amend after second amended complaint dismissed with
`prejudice); Chun v. Fluor Corp., 2021 WL 1788626, at *3 (N.D. Tex. May 5, 2021) (denying leave
`to amend after securities plaintiff had opportunity to correct deficiencies in initial consolidated
`complaint; observing that “further bites at the proverbial apple would prejudice the defendants by
`delaying this suit’s conclusion and subjecting the defendants to additional costs”).
`
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`a second bite after the initial consolidated or amended complaint, much less a third,3 which would
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`unduly prolong this litigation and undercut the PSLRA’s goals of limiting the burdens on
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`defendants from securities fraud claims that do not meet the particularity requirements.4
`
`ARGUMENT AND AUTHORITIES
`
`I.
`
`
`THE “NEW” ALLEGATIONS DO NOT SHOW FALSITY OR SUPPORT A
`STRONG INFERENCE OF SCIENTER
`
`The Opposition fails to explain how the “new” allegations demonstrate an actionable
`
`misstatement or support anything close to a strong inference of scienter. Much of the Opposition
`
`is devoted to CW11’s vague assertion that “15% to 20% of fake, fraudulent, and bad actor accounts
`
`on Tinder were themselves paying accounts.” (See Opp. at 3). In the SAC, however, CW11
`
`defined this “15% to 20%” category to include not just “bots,” “scammers,” and fake accounts,
`
`
`3 See Heinze v. Tesco Corp., 971 F.3d 475, 485 (5th Cir. 2020) (affirming denial of leave to amend
`after first amended complaint was dismissed with prejudice); Alaska Elec. Pens. Fnd. v. Flotek
`Indus., Inc., 915 F.3d 975, 979 (5th Cir. 2019) (affirming dismissal of initial amended complaint
`after appointment of lead plaintiffs); Kakkar v. Bellicum Pharms., Inc., 2020 WL 2845279, at *5
`(S.D. Tex. May 29, 2020) (denying leave to amend after initial consolidated complaint in securities
`class action); Heck v. Orion Grp. Holdings, Inc., 468 F. Supp. 3d 828, 863 (S.D. Tex. 2020)
`(denying leave to file second amended complaint in Rule 10b-5 action); Stephens v. Uranium
`Energy Corp., 2016 WL 3855860, at *24 (S.D. Tex. July 15, 2016) (denying leave to amend after
`dismissing first amended complaint in securities class action); Parker v. Hyperdynamics Corp.,
`2015 WL 5024027, at *20 (S.D. Tex. Aug. 25, 2015) (court entered final judgment of dismissal
`with prejudice after plaintiff’s consolidated complaint); Stockman v. Flotek Indus., Inc., 2010 WL
`3785586, at *32 (S.D. Tex. Sept. 29, 2010) (dismissing with prejudice after initial consolidated
`complaint); Oppenheim Pramerica Asset Mgmt. S.A.R.L. v. Encysive Pharms., Inc., 2007 WL
`2720074, at *6 (S.D. Tex. Sept. 18, 2007) (dismissing with prejudice initial consolidated complaint
`filed after selection of lead counsel); In re Administaff, Inc. Secs. Litig., 2006 WL 846378 (S.D.
`Tex. Mar. 30, 2006) (dismissing initial consolidated complaint with prejudice); In re Integrated
`Elec. Servs., Inc. Secs. Litig., 2006 WL 54021 (S.D. Tex. Jan. 10, 2006), aff’d, 497 F.3d 546, 556
`(5th Cir. 2007) (dismissing initial amended complaint with prejudice, which Fifth Circuit
`affirmed).
`4 See Chun, 2021 WL 1788626, at *3 (observing that “further bites at the proverbial apple would
`prejudice the defendants by delaying this suit’s conclusion and subjecting the defendants to
`additional costs”); Oppenheim Pramerica, 2007 WL 2720074, at *6 (“The Court will not further
`delay the final resolution of this dispute by allowing yet another amendment”).
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`but also any “users violating site rules” – an unparticularized catch-all category that potentially
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`includes purported violations of unspecified “site rules,” which completely undercuts this statistic
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`because it includes users wholly unrelated to Plaintiffs’ allegations. (See SAC ¶ 48, 99(a).)
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`Strategically ambiguous allegations of this sort are inconsistent with the PSLRA’s particularity
`
`requirement and further weigh against inferring scienter. See Tellabs, Inc. v. Makor Issues &
`
`Rights, Ltd., 551 U.S. 308, 326 (2007) (“[O]missions and ambiguities count against inferring
`
`scienter, for plaintiffs must state with particularity facts giving rise to a strong inference that the
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`defendant acted with the required state of mind”); see also infra at 10 n. 25.
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`Plaintiffs also fail again to identify any specifics as to how long these purported “bad actor”
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`accounts stayed active, how much revenue (if any) was received from these accounts, what portion
`
`of this purported “15-20%” figure actually comprised “fake” or “scammer” accounts, or what
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`specific knowledge Ginsberg or Swidler had regarding specific amounts of revenue obtained from
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`purportedly fake accounts (or regarding any other purported facts that Plaintiffs say contradict
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`their disclosures). CW13 confirmed that Tinder, like other Match Group apps, had an “anti-fraud
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`team” of employees who flagged potentially fraudulent accounts and “caught” bad actors –
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`allegations that undercut any inference that Defendants deliberately allowed bad actors to use
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`Tinder or consciously chose to receive revenue from “bad actors.” (See SAC ¶¶ 32, 48.) CW5
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`likewise admitted that Match.com “automatically refunded” subscription fees from blocked
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`accounts, 5 that he personally blocked more than one million accounts, and that the average
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`fraudulent account was removed within “15 hours.” (See SAC ¶¶ 40, 46, 49, 55.) Again, the fact
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`that Match.com quickly weeded out fraudulent accounts and automatically refunded subscription
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`5 See SAC ¶ 55.
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`fees for those accounts6 eviscerates any inference that Match.com intentionally pocketed revenues
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`from fraudulent subscribers or wanted fraudsters and criminals to have free reign on its site.
`
`Plaintiffs likewise fail to allege particularized facts showing that Tinder or any other Match Group
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`app intentionally allowed fraudulent, criminal, or dangerous persons to use their sites so that they
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`could receive revenue from these types of users (which is illogical given that this would likely
`
`cause legitimate paying customers to go elsewhere, thus hurting Match Group’s bottom line7).
`
`The Opposition also fails to show how the SAC’s vague assertion that “‘a significant
`
`percentage’ of those blocked accounts [on Match.com] were paid subscribers, often at the 3-month
`
`or 6-month levels” shows that Match Group defrauded investors. (See SAC ¶¶ 99(a), 101(a),
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`103(a).) Plaintiffs admit that these accounts were blocked and that the subscription fees were
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`refunded, which if anything weighs against any inference that Defendants acted fraudulently. (See
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`id. ¶ 55 (admitting that Match.com “automatically refunded the entirety of the subscription fees,
`
`even in the case of longer 6-month or 1-year subscriptions”)). Plaintiffs further posit that alleged
`
`scammers purchased these longer subscriptions “likely in an effort to make the fraudulent account
`
`seem more legitimate” and “‘to throw us off their trail’” (see id. ¶ 50), which again supports an
`
`inference that Defendants were not consciously ignoring alleged fraudulent activity. The fact that
`
`allegedly fraudulent users were actively trying to make it harder to detect their activity undercuts
`
`
`6 There is no merit to Plaintiffs’ assertion that Defendants have mischaracterized Plaintiffs’
`confidential witness allegations and are trying to “have it both ways” in noting Defendants’ efforts
`to combat fraud while criticizing Plaintiffs’ failure to allege any specific revenue impact (Opp. 6
`n. 6). Like its predecessor, the SAC is replete with allegations that Match Group did indeed
`undertake significant efforts to weed out fraud. It is also fully consistent to point out Match
`Group’s anti-fraud efforts while criticizing Plaintiffs’ complete lack of particularized allegations
`about revenue impacts. Bad actors pose problems not because of the amount of revenue they
`supposedly contribute before their accounts are shut down, but because of their potential to harm
`and drive away legitimate users, which would negatively affect Match Group’s revenues.
`7 See SAC ¶ 40.
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`the inference that Defendants knowingly allowed these accounts to remain active. The vague term
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`“significant percentage” also does not meet the PSLRA’s particularity requirements.
`
`More fundamentally, Plaintiffs again fail to tether their “confidential witness” allegations
`
`to any specific alleged misstatements or to any specific individual Defendant. Under Fifth Circuit
`
`law, a “pure” omission is not actionable unless it renders specific affirmative statements materially
`
`misleading.8 As the Court previously concluded, and as numerous cases confirm, Match Group’s
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`mere publication of accurate financial results does not contain an implicit affirmative
`
`representation that all revenues were obtained from non-bad-actor users.9 Indeed, no reasonable
`
`investor could infer such a guarantee from Match Group’s financial statements in light of Match
`
`Group’s specific warnings that users could engage in misconduct.10 Further, while Plaintiffs
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`concede that subscriptions from blocked Match.com accounts were refunded, there is no
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`particularized allegation identifying any accounting or legal rule actually requiring Match Group
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`to refund every dollar allegedly received from users engaged in inappropriate conduct.
`
`
`8 See Heinze, 971 F.3d at 483 (holding that “a pure-omission theory that is untethered to any
`specific false or misleading representation” is “not cognizable” under analogous false-statement
`language in SEC Rule 14a-9); Ind. Elec. Workers’ Pens. Tr. Fnd. IBEW v. Shaw Grp., 537 F.3d
`527, 541-42 (5th Cir. 2008) (holding that pure-omission claims are likewise not actionable under
`Section 10(b) or Rule 10b-5).
`9 Plaintiff asserts that, in addition to Ginsberg’s Wall Street Journal interview, the SAC also
`alleges additional purported misstatements. See Opp. at 11 n. 9. But the other supposedly “new”
`statements – including generalized truthful statements about the growth of Tinder subscribers –
`are not materially different from the similar statements rejected as insufficient to support a claim
`in the prior complaint. See SAC ¶¶ 120, 122; ECF No. 54 at 20 n. 58; In re KBR, Inc. Secs. Litig.,
`2018 WL 4208681, at *4 (S.D. Tex. Aug. 31, 2018) (“Bare reports of net income and revenue are
`not actionable for failing to disclose alleged misconduct”); Crutchfield, 2021 WL 1167578, at *12
`(rejecting claims based on statements about Match’s financial and operational conditions).
`10 See ECF No. 54, MTD at 6. While the Court correctly concluded that the allegations fail to
`show how the alleged omissions significantly alter the total mix of information (which applies
`with full force to the SAC), the allegations would fail even if the omissions did alter the total mix
`of information, as none of Match Group’s affirmative statements are rendered misleading by the
`alleged omissions. See supra footnote 8 (discussing inactionability of pure-omission claims).
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`The Opposition also fails to show how the new allegations establish that Ginsberg or
`
`Swidler personally knew of facts contradicting their disclosures, which is reason enough to dismiss
`
`the SAC.11 In cases like this, where the “core operations” doctrine does not apply,12 the complaint
`
`must allege with particularity that the individual defendants received specific information
`
`contradicting their disclosures.13 Again, generalized knowledge that an online dating company
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`faces challenges from bad actors trying to access their systems is not the same as specific
`
`knowledge that specific statements by specific individual Defendants were false.14
`
`As previously stated, the SAC’s allegations about stock sales and executive resignations
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`are not substantively different from the allegations in the prior complaint, which the Court
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`thoroughly and correctly rejected.15 The fact that executives sold a modestly greater amount of
`
`
`11 See Crutchfield, 2021 WL 1167578, at *16 (“To determine whether a corporate statement was
`made with the requisite scienter, courts look to the state of mind of the individual corporate official
`or officials who made the statement”); Flaherty & Crumrine Preferred Income Fund, Inc. v. TXU
`Corp., 565 F.3d 200, 208 (5th Cir. 2009) (plaintiff must establish intent of individual who made
`the alleged misstatement and may not rely on “collective” knowledge); Southland Sec. Corp. v.
`INSpire Ins. Sols., Inc., 365 F.3d 353, 366, 383 (5th Cir. 2004) (same).
`12 See Crutchfield, 2021 WL 1167578, at *18 (rejecting application of core operations and “special
`circumstances” doctrines).
`13 See Iron Workers Benefit and Pension Fund v. Anadarko Petroleum Corp., 788 F. App’x 268,
`269-70 (5th Cir. 2019) (affirming dismissal despite evidence that “could have led [individual
`defendants] to conclude that Anadarko’s Colorado operations weren’t in compliance with
`Commission rules,” where allegations did not support strong inference that “Walker and McBride
`were aware that Anadarko was, as a matter of law, in violation of Commission rules”); Rosenzweig
`v. Azurix Corp., 332 F.3d 854, 868 (5th Cir. 2003) (dismissing complaint where report “fail[ed] to
`identify exactly who supplied the information [that contradicted company’s public disclosures] or
`when [management] knew the information”); Abrams v. Baker Hughes Inc., 292 F.3d 424, 432
`(5th Cir. 2002) (dismissing complaint that “point[ed] to no specific internal or external report
`available [to the Defendants] at the time of the alleged misstatements that would contradict them”).
`14 See Kakkar, 2020 WL 2845279, at *4 (“Plaintiff must identify specific facts demonstrating
`scienter for each alleged misstatement made by each individual Defendant and not just describe
`what Defendants generally did or knew”).
`15 See Crutchfield, 2021 WL 1167578, at *19-21 (rejecting stock sale allegations); id. at *20-21
`(rejecting allegations regarding resignations of Ginsberg and Yagan, and noting (as remains the
`case in the SAC) that “Plaintiffs also do not plead any facts regarding Yagan’s knowledge of” the
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`stock or received more proceeds from stock sales during a time period when the stock price rose
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`52.8% (due to reasons wholly unconnected to the purported fraud) does not show scienter.16
`
`Plaintiffs’ case citations, by contrast, involve readily distinguishable complaints containing
`
`particularized facts showing that the executives knew of specific information contradicting their
`
`public disclosures.17 Having failed again to allege such facts, Plaintiffs’ case should be dismissed.
`
`
`alleged misconduct). Plaintiffs’ conclusory speculation that Yagan resigned because of a
`Congressional investigation that resulted in no charges against Match Group is the opposite of
`particularized, cogent, and compelling.
`16 See ECF No.54, MTD at 13, 24-25.
`17 In Lormand v. US Unwired, Inc., 565 F.3d 228 (5th Cir. 2009), one of the individual defendants
`wrote internal emails and memos warning that the company’s pivot toward customers with sub-
`prime credit profiles would cause “our business plan to fail” and vigorously opposing the plan,
`while simultaneously representing to investors that “we think these” customers can be reached
`“profitably.” See id. at 235-36. Nothing of the sort is alleged here. In Stone v. Life Partners
`Holdings, Inc., 26 F. Supp. 3d 575, 587-88, 600-01 (W.D. Tex. 2014), the outside auditor refused
`to approve the company’s financials, and the complaint offered far more particularized allegations
`regarding the individual defendants’ awareness of the improper calculations. In Wieland v. Stone
`Energy Corp., 2007 WL 2903178, at *5 (W.D. La. Aug. 17, 2007), the complaint included
`confidential witnesses directly alleging that a named defendant falsified reserve reports. In In re
`SunEdison, Inc. Secs. Litig., the CEO publicly stated the company would start “generating cash”
`after privately telling Board six days earlier that company would still be cash-negative. 300 F.
`Supp. 3d 444, 480 (S.D.N.Y. 2018). In Hall v. Rent-A-Center, Inc., the complaint pled specific
`facts showing how the CEO and CFO “were made aware of information” that contradicted their
`public statements. 2017 WL 6398742, at *28 (E.D. Tex. Oct. 19, 2017). In Spitzberg v. Houston
`Am. Energy Corp., 758 F.3d 676, 684–85 (5th Cir. 2014), defendants in “an extremely small” E&P
`company allegedly used an “industry-specific term” that communicated to investors that certain
`production or geologic testing had already been conducted but later admitted that no such
`production or testing had in fact occurred. In In re Cobalt Energy, Inc., 2016 WL 215476, at *6
`(S.D. Tex. Jan. 19, 2016), the defendants allegedly knew “there was ‘not even a remote chance’”
`the well at issue would be successful, yet continued to tout it. In Perez v. Higher One Holdings,
`Inc., the complaint cited confidential witnesses who alleged senior executives knew facts that
`contradicted the company’s publicly stated account of why a customer relationship ended. 2017
`WL 4246775, at *6 (D. Conn. Sept. 25, 2017). In Ramirez v. Exxon Mobil Corp., 334 F. Supp. 3d
`832, 855 (N.D. Tex. 2018), the complaint included specific emails where individual defendants
`were allegedly told of and approved proxy cost metrics that were lower than the publicly touted
`proxy cost. In Marcus v. J.C. Penney Co., Inc., 2015 WL 5766870, at *2-3 (E.D. Tex. Sept. 29,
`2015), the company announced it was raising new capital one day after the CEO assured he did
`not see conditions requiring the company to do so. In In re SeeBeyond Techs. Corp. Secs. Litig.,
`
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`II.
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`PLAINTIFFS’ NEW EXHIBITS ONLY FURTHER SUPPORT DISMISSAL18
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`Plaintiffs’ two proposed exhibits (ECF No. 58-3 and 58-4) simply confirm Plaintiffs’
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`inability to plead a securities fraud claim. As the Court noted in addressing the original December
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`2, 2019 ProPublica article, Match Group candidly disclosed that it “cannot implement a uniform
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`screening protocol” and that “[t]here are definitely registered sex offenders on our free products,”
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`which weighed against an inference “that Ginsberg or Swidler intended to hide or otherwise
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`mislead investors regarding Match’s fraudulent or dangerous users, or efforts to combat such
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`users.” Crutchfield, 2021 WL 1167578, at *18. The May 17, 2021 ProPublica article attached as
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`Exhibit A repeats the “lacked uniform procedures” statement from 2019 (see ECF No. 58-3 at 4)
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`and noted more recent statements that Match Group has “invested in new technology to enhance
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`its safety features,” is “working toward uniform policies across all of our companies,” is
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`“partnering with a victims’ advocacy group to audit its sexual violence policies,” and will “work
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`to improve our systems,” (see id. at 4, 11). Those statements convey a desire to improve, not to
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`defraud. While Plaintiffs criticize Match Group’s “three-sentence response” to ProPublica as
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`“lacking specifics” (see Opp. at 1919), the fact that Match Group again refrained from publicly
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`overstating its capabilities and instead signaled room for improvement further weighs against
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`the complaint alleged that the defendants “admittedly lied to analysts and investors” – a far cry
`from the allegations here. 266 F. Supp. 2d 1150, 1169 (C.D. Cal. 2003).
`18 Defendant