SAIC, Inc. (defendant) was a government contractor. SAIC contracted with New York City to create an automated timekeeping program for city employees. SAIC’s Deputy Program Manager, Gerard Denault, subcontracted with Technodyne to staff the project. This subcontract resulted in a kickback scheme as part of which Denault was illegally paid proportionally for each hour a Technodyne employee worked on the project. Prosecutors opened a criminal investigation into Denault in December 2010. In that same month, the city and the State of New York rejected pending contracts with SAIC worth over $150 million on account of concerns over Denault’s conduct. SAIC, aware of the investigation, hired an outside firm to conduct an audit. On March 9, 2011, an audit report containing evidence of the kickback scheme was finalized. On March 25, 2011, SAIC filed a Form 10-K with the Securities and Exchange Commission. The filing did not contain any mention of the scheme or potential liability on account of the scheme. By May 2011, Denault and others had been charged for fraud. It was not until June 2, 2011, that SAIC filed a Form 8-K disclosing the fraud and the fact that the city planned to attempt to recoup the improper charges. The Indiana Public Retirement System (IPRS) (plaintiff) sued SAIC for securities fraud in the United States District Court for the Southern District of New York. The district court dismissed the complaint. IPRS moved for leave to file an amended complaint. The district court denied the motion. IPRS appealed.