5th Cir. Pattern Jury Instr. (Civil) 7.1

1

—(Rule 10b-5)

Plaintiff [name] claims that Defendant [name]

violated the federal securities law, Rule 10b-5, which

makes it unlawful to:

1. employ any device, scheme, or artifice to

defraud;

2. make any untrue statement of a material fact

or to omit to state a material fact necessary in

order to make the statement not misleading; or

3. engage in any act, practice, or course of business that operates or would operate as a fraud

or deceit on any person,

in connection with the purchase or sale of any security.

2

To succeed on this claim, Plaintiff [name] must

prove each of the following elements

3

by a preponderance of the evidence:

1This instruction sets out the elements of a “typical private right of

action for securities fraud.” Stoneridge Inv. Partners, LLC v. Scientific-Atlanta, Inc. , 552 U.S. 148, 157 (2008). In more complex cases, additional

instructions may be necessary .

217 C.F .R. § 240.10b-5; Stoneridge Inv. Partners, LLC v. Scientific-Atlanta, Inc. , 552 U.S. 148, 156–57 (2008); Affco Invs. 2001, LLC v.

Proskauer Rose, LLP , 625 F .3d 185, 192 (5th Cir. 2010).

3Erica P . John Fund, Inc. v. Halliburton Co. , 131 S. Ct. 2179, 2184

(2011); Stoneridge Inv. Partners, LLC v. Scientific-Atlanta, Inc. , 552 U.S.

148, 157 (2008); Dura Pharm., Inc. v. Broudo , 544 U.S. 336, 341–42 (2005);

Affco Invs. 2001, LLC v. Proskauer Rose, LLC , 625 F .3d 185, 192 (5th Cir.

2010).

75

1. a material misrepresentation or omission by

Defendant [name];

2. made with an intent to deceive, manipulate, or

defraud;

4

3. a connection between the misrepresentation or

omission and the purchase or sale of a security;

4. reliance on the misrepresentation or omission;

5. economic loss; and

6. loss causation.

The first element requires a material misrepresentation or omission by Defendant [name]. A “misrepresentation” is a statement that is not true. Forward-looking statements, such as predictions or expressions

of opinion, are not representations of material facts so

long as they are not worded as fact or guarantees and

the person making the statements reasonably believed

them at the time they were made. An “omission” is actionable if it omitted to state facts that would be necessary to make other statements by Defendant [name], in

light of the circumstances under which they were made,

not misleading. A “material” fact is one that a reasonable investor would consider significant in the decision

whether to invest, a fact that alters the “total mix” of

information available to a reasonable investor. A minor

or trivial detail is not material.

To establish the second element, that Defendant

[name] acted with an intent to deceive, manipulate, or

defraud,

5

Plaintiff [name] must show that Defendant

[name] [stated material facts [he/she] knew to be false]

4Ernst & Ernst v. Hochfelder , 425 U.S. 185, 193 n.12 (1976); Goldstein

v. MCI WorldCom , 340 F .3d 238, 245 (5th Cir. 2003).

5Ernst & Ernst , 425 U.S. at 193 n.12; Goldstein, 340 F .3d at 245.