Plaintiffs' third claim regarding an allegedly false risk
factor fails on similar grounds. Plaintiffs contend that because
PRT had already failed to obtain Y2K business from certain
existing clients at the time of the IPO, statements such as
"[t]he Company expects that it will receive increase revenues for
Year 2000 solutions" and "[t]here can be no assurance . . . that
the Company will be successful in generating additional business
from its Year 2000 clients" were false and misleading. (Compl. ¶
33(d)). Again, the historical "fact" that PRT may have not
received certain Y2K projects from certain existing clients is
not inconsistent with the prospectus's projections of increased
Y2K business and cautions that such business might not
materialize. In other words, the "fact" that these clients did
not award Y2K business to PRT would not mean that PRT would
obtain no future Y2K business whatsoever.
Finally, plaintiffs contend that the risk factor concerning
PRT's intellectual property rights was false and misleading
because it failed to disclose PRT's dependence on third-party
technology for its Y2K solutions. (Compl. ¶ 33(e)). As discussed
in detail above, the prospectus repeatedly and explicitly
revealed the Company's reliance on other companies' software for
its IT services, including Y2K consulting. (See Prospectus at
3, 9, 24, 25, 26, 28). Accordingly, this claim, too, must fail.
In view of the foregoing, and looking at the prospectus as a
whole, I cannot reasonably conclude that "defendants'
representations, taken together and in context, would have
mis[led] a reasonable investor" about the nature of the
investment in PRT. Olkey, 98 F.3d at 5. As in Olkey, "the
prospectus when read in [its] entirety [is] not overly sanguine
but instead bespeaks caution." Id. at 5 (internal citations
omitted); see also Pincus, 936 F.2d at 763; Sheppard v. TCW/DW
Term Trust 2000, 938 F. Supp. 171, 179 (S.D.N.Y. 1996)
(dismissing §§ 11 and 12 claims where "the various risks inherent
in purchasing shares in the [investment] were adequately
Accordingly, plaintiffs' §§ 11 and 12 claims are dismissed, as
to all defendants, for failure to state a claim. Because
plaintiffs' § 15 "controlling persons" liability claim is
predicated upon the existence of an underlying §§ 11 or 12
violation, this claim is dismissed as well. See Milman, 72
F. Supp.2d at 235.
Plaintiffs have requested leave to replead in the event this
Court granted defendants' motions to dismiss. (See Pl. Mem. at
43 n. 27). While leave to amend a complaint "shall be freely
given when justice so requires," Fed.R.Civ.P. 15(a), it is within
the sound discretion of the court whether to grant leave to
amend. See, e.g., Hinerfeld, 1998 WL 397852, at *8 (citing
Foman v. Davis, 371 U.S. 178, 83 S.Ct. 227, 9 L.Ed.2d 222
(1962)). As plaintiffs have already had one opportunity to amend
their complaint, and because all of the claims contained in that
amended complaint are "belied by the plain language of the
prospectus, it would be an exercise in futility as well as a
waste of judicial resources to allow further amendment." Id.
(citations omitted); see also Pallickal v. Technology Int'l,
Ltd., No. 94 Civ. 5738(DC), 1996 WL 153699, at *3 (S.D.N.Y.Apr.
Defendants' motions to dismiss are granted and the amended
complaint is hereby dismissed with prejudice as to all
defendants. Plaintiffs' request for leave to amend the amended
complaint is denied.