Metzler Investment GMBH (Metzler) (plaintiff) was an investment company that owned stock in Corinthian Colleges, Inc. (Corinthian) (defendant). Metzler brought suit against Corinthian, alleging widespread fraud in Corinthian’s finances, orchestrated to obtain increased federal funding. Metzler alleged that the fraud caused loss to Metzler after Corinthian’s stock price dropped. Metzler made a number of claims of fraud against Corinthian, but primarily, Metzler alleged that Corinthian manipulated and falsified student enrollment to increase its federal funding. Metzler claimed that the market became aware of this fraud as a result of two publications: (1) a Financial Times article that noted that the U.S. Department of Education (DOE) investigated one of Corinthian’s campuses for improper financial aid practices and (2) a Corinthian press release decreasing its revenue and earning projections. The day the Financial Times article came out, Corinthian’s stock dropped 10 percent. However, it rebounded within three days. The stock price also dropped after the issuance of the press release. Corinthian filed a motion to dismiss for failure to state a claim. The district court granted the motion. Metzler appealed.