Securities Class Action Against Jones Soda Dismissed, Plaintiffs May Seek Leave to Amend

U.S. District Judge Robert Lasnik in Seattle dismissed the securities class action lawsuit against Jones Soda and several of its executives and directors on Monday. The lawsuit, filed on behalf of investors who bought Jones stock between January 2007 and May 2008, alleged misstatements regarding the company’s market penetration, which led to the stock’s overvaluation.

The Seattle Times reports that Jones’ profit dropped 98 percent in the second quarter of 2007, a decline the company blamed on delays in getting its canned products onto retailers’ shelves.

The court found that none of the seven alleged misstatements raised a strong inference that they were intentionally false, misleading, or made with deliberate recklessness. It ruled that however, that

dismissing the complaint with prejudice at this point seems premature because some of the deficiencies identified by the Court may be curable8 and plaintiffs are only now obtaining the benefit of the Court’s analysis of their claims. Plaintiffs will therefore be given thirty days in which to file a motion for leave to amend that is supported by a proposed amended pleading.