HBK Master Fund L.P. v. Maxlinear, Inc.

• Court: District Court, S.D. California
• Decided: January 2, 2025
• Docket: 3:24-cv-01033
• Status: Unknown

Opinion

2 3 4

8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10

11 HBK MASTER FUND L.P., et al., Case No.: 3:24-cv-01033-CAB-VET 12

Plaintiffs, 13 ORDER GRANTING MOTION TO 14 v. DISMISS WITH LEAVE TO AMEND

15 MAXLINEAR, INC., et al., [ECF No. 24] 16 Defendants. 17 18 19 This lawsuit largely mirrors Case No. 23-CV-01607-CAB-VET (hereinafter, “Water 20 Island”) which involved Securities Exchange Act claims arising from the same facts and 21 circumstances as the present case. On August 28, 2024 the Court dismissed the Water 22 Island plaintiffs’ lawsuit against identical Defendants for want of statutory standing under 23 Fed. R. Civ. P. 12(b)(6). Plaintiffs’ Section 10(b) and Section 20(a) claims are dismissed 24 with leave to amend in light of the Ninth Circuit’s ruling in In re: CCIV / Lucid Motors 25 Sec. Litig., 110 F.4th 1181, 1187 (9th Cir. 2024) (hereinafter, “Lucid Motors”). The Court 26 dismisses Plaintiffs’ Section 18 claim with leave to amend for failure to state a claim. 27 28 I. PROCEDURAL BACKGROUND Plaintiffs initially sought appointment as lead plaintiff in the Water Island class action. [Water Island, ECF No. 14.] That motion was denied. [Water Island, ECF No. 15.] Plaintiffs filed their complaint in a separate action on June 13, 2024. [ECF No. 1.] 2 Plaintiffs allege violations of the Securities Exchange Act: two theories under Section 3 10(b), a derivative liability suit under Section 20(a), and a Section 18 claim. [Compl. ¶¶ 4 175–97.] Plaintiffs have also pleaded common law fraud claims and one state law claim 5 pursuant to Cal. Civ. Code § 1709. [Compl. ¶¶ 206–27.] 6 II. FACTUAL ALLEGATIONS 7 Much of Plaintiffs’ allegations parallel those pleaded in Water Island. The Court 8 takes the pleaded material facts as true and construes them in the light most favorable to 9 Plaintiffs.1 Stoner v. Santa Clara Cnty. Office of Educ., 502 F.3d 1116, 1120 (9th Cir. 10 2007). The Defendants are familiar: (1) MaxLinear, a Delaware corporation with its 11 principal executive offices located in Carlsbad, California; (2) Defendant Kishore 12 13 Seendripu, who served as MaxLinear’s Chief Executive Office; and (3) Defendant Steven 14 Litchfield, who served as Chief Financial Officer and Chief Corporate Strategy Officer. 15 [Compl. ¶¶ 31–34.] Both individual Defendants are alleged to have made, approved, or 16 adopted false statements that caused or maintained artificial inflation in the price of Silicon 17 Motion Technology Corporation’s (“SIMO”) shares. [Id. ¶¶ 32–33.] SIMO is a Taiwan- 18 based chip manufacturer and was MaxLinear’s target in the proposed merger. [Id. ¶ 39.] 19 All Defendants are also alleged to have participated in a fraudulent scheme affecting SIMO 20 securities. [Id. ¶¶ 136–41, 175.] 21 Plaintiffs are HBK Master Fund L.P. and HBK Merger Strategies Master Fund. L.P. 22 Both are incorporated in the Cayman Islands. [Id. ¶¶ 27–28.] Both are managed by another 23 entity, HBK Investments L.P. [Id.] Plaintiffs purchased SIMO American Depository 24 25

26 1 The Court takes judicial notice of Defendants’ Exhibits 1–5 filed with their motion to dismiss: (1) the merger agreement contained in MaxLinear’s Form S-4 as filed with the Securities and Exchange 27 Commission (“SEC”), (2) the transcript from the June 6, 2023 Stifel Conference, (3) MaxLinear’s Form 28 425 as filed with the SEC containing an excerpt from the Stifel Conference, (4) MaxLinear’s Form 8-K as filed with the SEC on June 28, 2023, and (5) MaxLinear’s Form 8-K as filed with the SEC on July 26, 2023. [ECF Nos. 24:4–8.] These exhibits contain facts that are “accurately and readily determined from sources whose accuracy cannot reasonably be questioned.” Fed. R. Evid. 201(b)(2). Plaintiffs incorporate Shares (“ADSs”) from June 2, 2023 through July 26, 2023. [Id. at p.1 & ¶ 127.] Like the 2 Water Island plaintiffs, Plaintiffs claim that the acquiring party, MaxLinear, committed 3 fraud in the course of its failed combination with SIMO. [See id. ¶¶ 126–31.] 4 The gravamen of Plaintiffs’ fraud theory is almost identical to the one pleaded in 5 Water Island. Plaintiffs refer repeatedly to the Water Island complaint, in an apparent 6 effort to incorporate it. [See id. ¶ 79.] Plaintiffs allege that Defendants made material 7 misrepresentations and omissions about MaxLinear’s commitment to its combination with 8 SIMO all while secretly planning to breach the merger agreement (“Agreement”). [See id. 9 ¶¶ 120–35.] By its terms, the merger required the blessing of domestic and foreign (the 10 Chinese State Administration for Market Regulation, or “SAMR”) antitrust regulators on 11 or before August 7, 2023. [Id. ¶ 46; ECF No. 24-4 at 21.] According to Plaintiffs, 12 13 MaxLinear’s failure to obtain merger clearance would limit liabilities from the failed 14 merger to a $160 million breakup fee. [Id. ¶ 55.] MaxLinear could avoid the fee entirely 15 if it could prove that SIMO was in “material breach” of the Agreement or faced a “Material 16 Adverse Effect” as defined by the same. [See id. ¶¶ 55, 57–58.] If MaxLinear terminated 17 the deal outside of these narrow circumstances, it would face significantly greater financial 18 penalties. [Id. ¶ 59.] 19 Plaintiffs assert that as MaxLinear awaited SAMR approval, the business case for 20 the merger unraveled. [Id. ¶ 77.] Instead of terminating the merger with required penalties, 21 Defendants hoped for SAMR’s denial of antitrust clearance as a means to thwart the deal. 22 [See id. ¶ 141.] When SAMR approved the merger on July 26, 2023, despite serious market 23 uncertainty, Defendants concocted a sham breach by SIMO to avoid liabilities that 24 MaxLinear would face from its own unilateral exit. [See id. ¶¶ 51–53, 86–97; see ECF No. 25 24-8 at 3.] Plaintiffs claim that Defendants did not even take “basic and rudimentary” pre- 26 27 28

2 Plaintiffs repeatedly reference but do not specifically define the “relevant period.” The Court construes the facts of the complaint in the light most favorable to the Plaintiffs and uses the date of the first and last merger integration steps—a strategic decision that revealed Defendants’ true intention to 2 exit the merger all along. [See id. ¶¶ 106–07.] 3 The purported misstatements track Water Island, save for one: Plaintiffs allege that 4 on June 2, 2023, Defendant MaxLinear, CFO Steven Litchfield, and other unidentified 5 MaxLinear representatives participated in a webinar in which they were “directly asked 6 whether there was conviction in the SIMO deal despite the cyclical downturn in technology 7 in semiconductors.”3 [Id. ¶¶ 120–21.] “They” responded that MaxLinear remained “very 8 interested in SIMO as an asset” and that there were “no issues with the deal and funding 9 was committed.” [Id. ¶ 121.] According to Plaintiffs, “MaxLinear representatives” 10 asserted that “MaxLinear was excited about the acquisition and that the rationale for the 11 deal was stronger than ever.” [Id.] 12 13 Next is an alleged misrepresentation pleaded identically by the Water Island 14 plaintiffs: Plaintiffs assert that on June 6, 2023, MaxLinear and Defendant Seendripu 15 participated in a conference (the “Stifel Conference”) involving 300 companies and more 16 than 1,600 investors. [Id. ¶ 68.] During a so-called “fireside chat,” a conference 17 representative asked Defendant Seendripu about the merger, describing it as “one of the 18 topics investors want to hear most about.” [Id. ¶ 69; ECF No. 24-6 at 2.] The representative 19 asked about “SIMO,” an “update on the asset strategically,” and whether SIMO was “an 20 asset that you’re very interested in acquiring.” [Id.; ECF No. 24-6 at 2.] Defendant 21 Seendripu responded that MaxLinear was “very, very . . . bullish[] that we can acquire the 22 synergies that we told you all about,” that the “basic rationale” for the merger “ha[d] not 23 changed at all,” and that he “believe[ed]” that SIMO was a “very strategic asset for 24 [MaxLinear].” [Id. ¶ 70; ECF No. 24-6 at 2.] Commenting on a specific merger-related 25 synergy, Defendant Seendripu indicated that “together, we bring the portfolio to make it 26 happen.” [Id.; ECF No. 24-6 at 2.] On June 7, 2023, MaxLinear filed a transcript excerpt 27 28 containing the alleged misrepresentations with the SEC. [Id. ¶ 71; ECF No. 24-6.] The final alleged misrepresentation, also pleaded by the Water Island plaintiffs, are 2 statements from Defendants’ June 28, 2023 Form 8-K filed with the SEC confirming that 3 “MaxLinear and SIMO re-filed [for merger clearance] under the [Hart-Scott-Rodino] Act.” 4 [Id. ¶¶ 134, 179; ECF No. 24-7 at 3.] Plaintiffs claim that by this point, MaxLinear had no 5 actual commitment to the merger because it no longer constituted an attractive business 6 proposition. [Id. ¶ 135.] 7 III. LEGAL STANDARD 8 Fed. R. Civ. P. 12(b)(6) permits a party to file a motion to dismiss for “failure to 9 state a claim upon which relief can be granted.” “To survive a motion to dismiss, a 10 complaint must contain sufficient factual matter . . . to ‘state a claim for relief that is 11 plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. 12 13 v. Twombly, 550 U.S. 544, 570 (2007)). 14 “Section 10(b) of the Exchange Act bars conduct involving manipulation or 15 deception, manipulation being practices that are intended to mislead investors by 16 artificially affecting market activity, and deception being misrepresentation, or 17 nondisclosure intended to deceive.” Desai v. Deutsche Bank Sec. Ltd., 573 F.3d 931, 938 18 (9th Cir. 2009) (quoting Ganino v. Citizens Utils. Co., 228 F.3d 154, 161 (2d Cir. 2000)). 19 “Section 20(a) of the Exchange Act imposes secondary liability on controlling persons 20 involved in a primary Section 10(b) violation.” Lucid Motors, 110 F.4th at 1184. Section 21 10(b) lawsuits are subject to the heightened pleading standards of Fed. R. Civ. P. 9(b) and 22 the Private Securities Litigation Reform Act. Zucco Partners, LLC v. Digimarc Corp., 552 23 F.3d 981, 990 (9th Cir. 2009), as amended (Feb. 10, 2009). 24 The Ninth Circuit recently explained the limits on the class of plaintiffs who may 25 seek Section 10(b) relief. See Lucid Motors, 110 F.4th at 1184–85. After Plaintiffs filed 26 this lawsuit, the Ninth Circuit clarified that Exchange Act plaintiffs must follow the 27 28 “purchaser-seller rule,” a “bright-line rule” that makes clear that “a plaintiff has standing under Section 10(b) if the plaintiff purchased or sold the securities about which the alleged misrepresentations were made.” Lucid Motors, 110 F.4th at 1186 (citing Blue Chip Stamps 2 v. Manor Drug Stores, 421 U.S. 723, 727, 755 (1975)). 3 IV. DISCUSSION 4 i. Plaintiffs do Not Have Statutory Standing for their Section 10(b) and 5 20(a) Claims 6 As it did in Water Island, the first-order question of statutory standing resolves the 7 10(b) and Section 20(a) claims. Defendants challenge Plaintiffs’ standing to maintain a 8 Section 10(b) suit. [ECF No. 24 at 30.] As alleged in their complaint, Plaintiffs did not 9 purchase MaxLinear stock during the relevant period and instead, held only the securities 10 of the target SIMO. Defendants argue that the alleged misrepresentations were made about 11 MaxLinear. According to Defendants, to have standing for a 10(b) lawsuit pursuant to the 12 13 purchaser-seller rule, Plaintiffs must have purchased MaxLinear securities. 14 Applying the purchaser-seller rule to the relevant portions of the complaint, the 15 dispositive issue for standing is whether the pleaded misrepresentations were made about 16 SIMO. Lucid Motors, 110 F.4th at 1186. The Court finds they were not. The alleged 17 misstatements, including the statements from the June 2, 2023 webinar, are about 18 MaxLinear’s evaluation of the benefits of the merger and MaxLinear’s continued 19 commitment to the merger. The purported misstatements are not about SIMO securities. 20 Plaintiffs argue that the statements relating to Defendants’ intent to complete the 21 merger (and its projected benefits to MaxLinear) are actually statements about SIMO 22 securities. [ECF No. 26 at 2.] Plaintiffs’ argument is best construed as a variant of the 23 “sufficiently connected” statutory standing test which asks “whether a security is 24 sufficiently connected to misstatement for standing purposes.” Lucid Motors, 110 F.4th at 25 1186. This test is one that the Ninth Circuit expressly disavowed in Lucid Motors on 26 grounds that it invited “endless case-by-case analysis.” Id. Indeed, any “sufficient 27 28 connection” is already suspect where Plaintiffs’ complaint makes clear that “[a]t the time of Defendants’ alleged misrepresentations, [MaxLinear] and [SIMO] were two entirely separate companies.” Id. at 1187. Indeed, Plaintiffs highlight the complete absence of 2 pre-merger integration between MaxLinear and SIMO. [Compl. ¶¶ 106–07.] 3 The bottom line is that there is no allegation in the complaint that anyone made any 4 representations about SIMO securities. The Ninth Circuit has set a bright-line rule that the 5 “security” at issue must be one about which the alleged misrepresentations were made. 6 The Ninth Circuit has imposed this rule despite the result that such a bright-line may 7 “prevent[] some deserving plaintiffs from recovering damages.” Lucid Motors, 110 F.4th 8 at 1185 (quoting Blue Chip Stamps, 421 U.S. at 738). For that reason, Plaintiffs do not 9 have 10(b) or Section 20(a) standing. See In re Genius Brands Int’l, Inc. Sec. Litig., 97 10 F.4th 1171, 1180 (9th Cir. 2024) (explaining that there is no Section 20(a) derivative 11 liability without a primary securities law violation). 12 13 ii. Plaintiffs Lack Statutory Standing for their Section 10(b) Scheme 14 Liability Claim 15 Though proceeding under Rule 10b, scheme liability claims are distinct from a 10(b) 16 misrepresentation/omission claim because they involve deceptive conduct. See In re 17 Galena Biopharma, Inc. Sec. Litig., 117 F. Supp. 3d 1145, 1192 (D. Or. 2015). The 18 elements for scheme liability are: “(1) that the defendant committed a deceptive or 19 manipulative act, (2) in furtherance of the alleged scheme to defraud, (3) with scienter, and 20 (4) reliance.” Plumber & Steamfitters Local 773 Pension Fund v. Danske Bank A/S, 11 21 F.4th 90, 105 (2d Cir. 2021). The scheme must “encompass [. . .] conduct beyond those 22 misrepresentations or omissions.” WPP Lux. Gamma Three Sarl v. Spot Runner, Inc., 655 23 F.3d 1039, 1057 (9th Cir. 2011) (quoting 17 C.F.R. § 240, SEC Rules 10b-5(a) and (c)). 24 An open question for their scheme claim is whether Plaintiffs must clear the statutory 25 standing rule from Lucid Motors. The scheme pleaded by Plaintiffs is based on the exact 26 same alleged misrepresentation underlying their traditional 10(b) claim. The only 27 28 deceptive conduct pleaded is that Defendants (including MaxLinear itself) caused MaxLinear to apply for the (statutorily required) regulatory approval of the merger and filed a Form 8-K with the SEC. [See Compl. ¶ 179.] But this “conduct” is simply a neutral 2 precursor to the alleged misrepresentations contained in the public statement published by 3 MaxLinear in its Form 8-K. 4 This Court holds that where the challenged conduct relies principally on an alleged 5 misstatement to meet the elements of a scheme claim, Plaintiffs may proceed with their 6 suit only if they “purchased or sold the securities about which the alleged 7 misrepresentations were made.” Lucid Motors, 110 F.4th at 1186. To conclude otherwise 8 would undermine the purchaser-seller rule, allowing a plaintiff to proceed with 10(b) 9 scheme liability where they otherwise could not under a misrepresentation theory for the 10 exact same liability imposing misrepresentation.5 11 Even if this Court assumes the non-application of the purchaser-seller rule,6 the 12 13 alleged conduct cannot meet the baseline requirement to state a scheme claim that 14 Defendants committed a “manipulative or deceptive act.” See S.E.C. v. Daifotis, No. C 11- 15 00137 WHA, 2011 WL 2183314, at *9 (N.D. Cal. June 6, 2011), modified on 16 reconsideration, No. C 11-00137 WHA, 2011 WL 3295139 (N.D. Cal. Aug. 1, 2011) 17 (challenged conduct must involve a “sham” or “inherently deceptive” transactions.); see 18 also S.E.C. v. Lucent Techs., Inc., 610 F.Supp.2d 342, 360 (D.N.J. 2009). The action of 19 submitting to regulatory antitrust approval was required by statute and contract, [Compl. ¶ 20 46], as was the Form 8-K disclosure. See Scherk v. Alberto–Culver Co., 417 U.S. 506, 528 21 n.6 (1974). Conduct that is merely consistent with “the normal course of business” and is 22 not “inherently deceptive” cannot form the basis of scheme liability. Simpson v. AOL Time 23 24 25

26 4 Plaintiffs refer to this form in their factual allegation as a Form 8-K but then switch, with a singular reference, to “Form 10-K” in their claim section. [Compare Compl. ¶¶ 75, 134 with Compl. ¶ 179.] The 27 Court construes the latter as “Form 8-K” consistent with the pleaded facts. 28 5 In applying the Lucid statutory standing requirement, the Court is not dismissing the scheme claim simply because the 10(b) claim fails. See In re Alphabet, Inc. Sec. Litig., 1 F.4th 687, 709 (9th Cir. 2021). 6 The statutory standing analysis from Lucid Motors is different from Article III standing in that the latter may not be assumed for purposes of a 12(b)(6) analysis. Steel Co. v. Citizens for a Better Environment, Warner Inc., 452 F.3d 1040, 1050 (9th Cir. 2006) (vacated on other grounds); Daifotis, 2 2011 WL 2183314, at *9. 3 iii. Plaintiffs Fail to Sufficiently Plead a Section 18 Claim 4 On Sept. 25, 2024, the Court ordered supplemental briefing on Plaintiffs’ Section 18 5 claim. [ECF No. 28.] The parties filed their briefs, [ECF Nos. 30–32], and the Court finds 6 it suitable to resolve this issue on the papers. See LR 7.1(d)(1). 7 First is the question of applicable pleading standards. Because Section 18 claims are 8 rooted in fraud, they are subject to the heightened pleading standards of Rule 9(b). Vess v. 9 Ciba-Geigy Corp. USA, 317 F.3d 1097, 1103–04 (9th Cir. 2003) (where a plaintiff 10 “allege[s] a unified course of fraudulent conduct and rel[ies] entirely on that course of 11 conduct as the basis of a claim . . . the claim is said to be “grounded in fraud” . . . and the 12 13 pleading of that claim as a whole must satisfy the particularity requirement of Rule 9(b)”). 14 Additionally, the Private Securities Litigation Reform Act requires the complaint to “state 15 with particularity facts giving rise to a strong inference that the defendant acted with the 16 required state of mind.” 15 U.S.C. § 78u–4(b)(2). There appears to be some debate as to 17 whether Section 18 is subject to the exacting pleading standard imposed by the PSLRA. 18 Compare Dekalb Cnty. Pension Fund v. Transocean Ltd., 817 F.3d 393, 408 (2d Cir. 2016) 19 (Section 18(a) does not require a particular state of mind) with Kelley v. Rambus, Inc., No. 20 07-cv-1238, 2008 WL 5170598, at *3 (N.D. Cal. Dec. 9, 2008) (applying the PSLRA to 21 Section 18 claims), aff’d, 384 F. App’x 570 (9th Cir. 2010). Nevertheless, the Court need 22 not resolve this matter as it proceeds under the Rule 8(b) plausibility standard and the 23 heightened pleading standards of Rule 9(b) to resolve the Section 18 claim. 24 The next issue is whether the statutory standing requirement from Lucid Motors 25 applies to Section 18. The Court understands this to be an issue of first impression and 26 concludes that the purchaser-seller rule does not apply. Lucid Motors focused on 27 28 misstatements/omissions under the judge-created 10(b) framework. 110 F.4th at 1184. The Ninth Circuit, relying on Blue Chip Stamps, demanded a restrictive vision of statutory standing precisely because 10(b) liability is judicially fashioned. See id. at 1184–85. In contrast, Section 18 contains an express right of action. See Beebe v. Pac. Realty Tr., 99 2 F.R.D. 60, 70 (D. Or. 1983) (citing Ross v. A. H. Robins Co., 607 F.2d 545, 556 (2d Cir. 3 1979) (“The purpose of § 18(a) is to further the particular objective of encouraging reliance 4 upon records filed with the SEC by expressly authorizing damage actions against those 5 making false filings.”). 6 Defendants make the policy argument that the purchaser-seller rule should apply to 7 Section 18 since to do otherwise would unwisely expand liability under the Exchange Act. 8 [ECF No. 32 at 12–13.] But “[i]t is well established that when the statute’s language is 9 plain, the sole function of the courts—at least where the disposition required by the text is 10 not absurd—is to enforce it according to its terms.” Lamie v. U.S. Trustee, 540 U.S. 526, 11 534 (2004). And the text of Section 18 forecloses Defendant’s argument: “any person” 12 13 who makes a statement filed pursuant to the Exchange Act may face liability for materially 14 false or misleading statements by a person who, relying on that statement, “purchased or 15 sold a security at a price which was affected by such statement.” 15 U.S.C. § 78r. 16 Whether or not the purchaser-seller rule applies, Plaintiffs still fail to state a claim. 17 Plaintiffs’ Section 18 claim is built on only one set of statements: those found in 18 MaxLinear’s June 28, 2023 Form 8-K filed with the SEC. [Compl. ¶¶ 198–205; ECF No. 19 24-7 at 3.] To state a Section 18 claim, Plaintiffs are required to plead that (1) 20 “Defendant[s] made or caused to be made a statement of material fact that was false or 21 misleading at the time and in light of the circumstances under which it was made [or 22 falsity];” (2) in a document filed pursuant to the Exchange Act; (3) Plaintiffs actually relied 23 on the false statement; and (4) suffered loss as a result. Oaktree Cap. Mgmt., L.P. v. 24 KPMG, 963 F. Supp. 2d 1064, 1081 (D. Nev. 2013) (quoting Deephaven Private Placement 25 Trading, Ltd. v. Grant Thornton & Co., 454 F.3d 1168, 1171 (10th Cir. 2006)); see 15 26 U.S.C. § 78r(a). 27 28 To proceed under Section 18, a plaintiff must plead actual reliance. Howard v. Everex Sys., 228 F.3d 1057, 1063 (9th Cir. 2000). In support of that element, Plaintiff alleges the following: Arenli eindv uepsotmn einntf oprrmofaetsiosino ncoaln wtaionrekdin ign othne b Jeuhnaelf 2o8f, P2l0a2in3t iFffosr mre a8d- Kan idn amctaukailnlyg 2 each purchase of Silicon Motion ADSs. 3 4 [Compl. ¶ 200.] 5 Citing Suprema Specialties, Inc. Securities Litigation, Defendants argue that this 6 claim fails to sufficiently allege reliance under the plausibility pleading standard. 438 F.3d 7 256 (3d Cir. 2006). In that case, the Third Circuit dismissed a Section 18 claim where 8 plaintiffs alleged that they “received, reviewed, actually read, and relied upon” various 9 Exchange Act filings, including 10-Ks. Id. at 284. According to the Third Circuit, 10 “[p]laintiffs failed . . . to plead facts probative of their actual reliance on any specific false 11 statements contained in those filings.” Id. Perhaps the Form 8-K pointed to by Plaintiffs 12 contains fewer statements overall versus the set of materials at issue in Suprema 13 Specialties, but the underlying reasoning applies in equal force. Plaintiffs do not identify 14 which false or misleading statement in the 8-K that they (through an investment 15 professional) actually relied on. 16 Compounding the actual reliance problem, the Form 8-K contains statements that 17 18 cannot be alleged to be untruthful because they are literally true. In re Intuitive Surgical 19 Sec. Litig., 65 F. Supp. 3d 821, 835 (N.D. Cal. 2014) (“[B]ecause Defendants’ statements 20 are literally true . . . the court finds these statements, as alleged, would not plausibly mislead 21 a reasonable investor.”). Consider the following statement from the Form 8-K: 22 MaxLinear and Silicon Motion previously filed under the HSR Act, and the 23 HSR Waiting Period expired at 11:59 p.m. ET on June 27, 2022.

24 [See Compl. ¶¶ 198–205; ECF No. 24-7 at 3.] There is no question that MaxLinear and 25 SIMO previously filed under the HSR Act. [See Compl. ¶ 74.] The same applies to the 26 statement that the merger was “conditioned upon . . . the expiration or termination of the 27 [regulatory] waiting period”: the governing agreement makes that point indisputable. [Id. 28 ¶¶ 75, 133; see ECF No. 24-4 at 20 (§ 6.1(d)) (listing as a condition to consummation of 1 ||the merger that “[a]ny applicable waiting period, together with any extensions thereof, 2 under the HSR Act shall have expired... .”).] 3 At bottom, Plaintiffs have failed to plausibly plead reliance in support of their * Section 18 claim. Many of the statements from the Form 8-K—included in the larger set ° of statements Plaintiffs could hypothetically rely on—cannot, as a matter of law, mislead ° anyone. As such, the Court dismisses Plaintiffs’ Section 18 claim under Rule 12(b)(6). iv. The Court Declines to Rule on the Remaining Common Law and State

9 Law Claims 10 The Court declines to exert supplemental jurisdiction over Plaintiffs’ common law 11 || and state law claims based on 28 U.S.C. § 1367(c)(3). 12 Vv. CONCLUSION 13 With respect to Plaintiffs’ Section 10(b) and 20(a) claims under the Exchange Act, 14 Court is not aware of any relevant exceptions to the purchaser-seller rule. Because 15 Plaintiffs did not hold MaxLinear’s stock during the relevant period and the alleged 16 || misrepresentations were made about MaxLinear, the Court grants Defendants’ motion to 17 || dismiss those claims for lack of statutory standing pursuant to Fed. R. Civ. P. 12(b)(6). 18 Court grants Defendants’ motion to dismiss the Section 10(b) scheme claim on the 19 same grounds, and in the alternative, for failure to state a claim. The Court likewise grants the motion to dismiss Plaintiffs’ Section 18 claim for a failure to state a claim. All claims are dismissed with leave to amend. Plaintiffs may file any amended complaint by January 17, 2025.

24 35 Itis SO ORDERED. 26 27 Dated: January 2, 2025 € □ 28 Hon. Cathy Ann Bencivengo United States District Judge