Source: cases/15usc78j/f3d-915-975-alaska-elec-pension-fund-v-flotek.case
Case source: https://www.neochart.com/catalog/cases/f3d/volume_915/0975_01/index.html
To withstand a motion to dismiss, "an inference of scienter must be more than merely plausible or reasonable-it must be cogent and at least as compelling as any opposing inference of nonfraudulent intent."
Thus, Chisholm's use of incorrect data at the September 2015 conference also fails to give rise to a strong inference of scienter.
We agree that such allegations are insufficient to raise a strong inference of scienter and, at most, indicate "simple or even inexcusable negligence," a lesser showing than is required here.
casedsl 1.2 # author: Flash3 (gemini-3.8-flash-high) # triaged-by: Fable (2026-11-10) case /f3d/915/0975-01 name Alaska Elec. Pension Fund v. Flotek Indus., Inc. cite 915 F.3d 975 (2019) court United States Court of Appeals for the Fifth Circuit date 2019-02-07 url catalog/cases/f3d/volume_915/0975_01/index.html source ir/caselaw/f3d_915.jsonl sha1=de7ff58f4c5cc62ff2302af9208c52d52d8019df chars=28822 # unanimous panel opinion (Dennis, J.); its footnotes are appended at @26941.. and belong to the same opinion opinion op : majority by Dennis @0..28822 controlling party p1 : Flotek Industries, Inc. and CEO Chisholm count c1 : class action securities fraud law 15usc78j role applied posture private securities fraud class action; dismissal of complaint under Rule 12(b)(6) and PSLRA affirmed result claimant-lost element scienter : not-satisfied [pleaded] party p1 count c1 route strong-inference-pleading pattern CEO presents third-party-sourced product data that proves wrong; no allegation he knew, error easy to check fact @17349..17539 [supports] | The starkest example of Flotek's provision of false information is that Chisholm presented demonstrably false information at the September 2015 conference in the form of incorrect well data. fact @18791..18957 [supports] | It does appear that it would have been very easy to check if this data was correct-Flotek verified the alleged errors and responded to the Bronte Report within a day. fact @20418..20595 [supports] | Indeed, as Chisholm admitted, there was a failure in quality control, because Flotek did not cross-reference "[the Drillinginfo data] with the [Texas] Railroad Commission data." fact @18958..19137 [cuts-against absent] | However, while this suggests negligence, there is no indication that Defendants had reason to know of any deficiencies in quality control problems before the data was made public. fact @16833..16971 [cuts-against absent] | However, there is no specific allegation that Chisholm knew at the time he made the statement at issue that FracMax utilized an algorithm. rule @11139..11344 | To withstand a motion to dismiss, "an inference of scienter must be more than merely plausible or reasonable-it must be cogent and at least as compelling as any opposing inference of nonfraudulent intent." held @19952..20082 | Thus, Chisholm's use of incorrect data at the September 2015 conference also fails to give rise to a strong inference of scienter. held @25797..25988 | We agree that such allegations are insufficient to raise a strong inference of scienter and, at most, indicate "simple or even inexcusable negligence," a lesser showing than is required here. gloss Fifth Circuit holds that presenting erroneous well-production data at an investor conference, calling the software's evidence "conclusive" and its data "un-adjusted" and "back-checked", suggests at most negligence: no particularized allegation that Chisholm knew of the errors or of the missing quality control when he spoke, the company is too large for the "special circumstances" position-based inference, and group pleading is rejected.