On June 5, 2014, the U.S. Court of Appeals for the First Circuit dismissed a securities fraud lawsuit against a biologics manufacturer alleged to have defrauded investors by failing to disclose potentially unfavorable business developments. The decision was a victory for WLF, which filed a brief urging the court to crack down on lawsuits alleging “fraud by hindsight”—that is, inferring early knowledge of adverse events based on little more than an allegation that the company “must have known” in advance that the events were bound to happen. A securities fraud complaint must include allegations that give rise to a “strong inference” of scienter (i.e., an intent to deceive). The appeals court agreed with WLF that a complaint cannot reach the “strong inference” threshold on the basis of allegations that the defendant did not disclose every piece of potentially adverse information, particularly where (as here) the information was unlikely to have a material impact on company earnings.