Northern District of Florida Judge Richard Smoak dismissed a securities fraud class action complaint filed by class action attorneys representing shareholders of The St. Joe Company. The complaint concerned alleged misrepresentations of the value of properties the company owned in the Florida panhandle.
St. Joe is now one of the largest real estate development companies in Florida. The company operates its business in four segments: (1) residential real estate; (2) commercial real estate; (3) rural land sales; and (4) forestry. St. Joe allegedly failed to timely take an impairment charge which caused it to overstate the value of its assets when the real estate market crashed in recent years.
In dismissing the complaint, the court stated:
Plaintiff’s claims of misrepresentation are insufficient to meet the standard of pleading fraud with particularity because they fail to allege that Defendants acted with the requisite scienter and made statements that they knew were materially false at the time. Additionally, Plaintiff has failed to establish loss causation.
Meyer v. The St. Joe Company, 11-cv-27 (N.D. Fla.) (Smoak, J.).