1st Circ. Resurrects Stock-Drop Suit Over Carbonite Product

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By Hailey Konnath (December 22, 2021, 9:41 PM EST) — The First Circuit on Wednesday revived a securities suit against Carbonite Inc. over a data backup product that never worked, ruling that the complaint sufficiently alleges that the company’s executives either inquired about the product or were reckless in failing to do so.

The three-judge panel sided with the Construction Industry and Laborers Joint Pension Trust, which appealed a Massachusetts federal court’s October 2020 decision finding that the trust’s proposed class of investors hadn’t shown that then-CEO Mohamad Ali and then-Chief Financial Officer Anthony Folger intended to dupe the market about the product, known as the Server Backup VM Edition, or…

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