United States Court of Appeals for the Second Circuit
228 F.3d 154 (2000)
Citizens Utility Company (defendant) was a publicly traded corporation that had enjoyed fifty consecutive years of increases in earnings and revenue. In 1995, one of Citizens’ large contracts fell through. As a result, Citizens rushed to enter into another contract with a telephone company providing services in Hungary. Citizens received a large sum of money in this transaction. However, instead of including this money in its 1995 earnings statements, Citizens spread this amount out over the first two quarters of 1996. This resulted in an apparent increase in revenue for the first two quarters of 1996, which would not have occurred otherwise. When this was discovered by investors (Ganino) (plaintiff), a suit was brought against Citizens. The district court ruled in favor of Citizens. Ganino then appealed to the Second Circuit Court of Appeals.
Rule of Law
Holding and Reasoning (Katzmann, J.)
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