San Diego – October 6, 2023 – Cooley represented IonQ, a quantum computing hardware and software company, in a consolidated securities fraud class action initially brought by former investor Michael Leacock. Lawyers Koji Fukumura, Ryan Blair, David Mills, Elizabeth Wright, Caitlin Munley, Linh Nguyen, Jessica Taylor and Vivienne Pismarov led the Cooley team representing IonQ.
The lead plaintiffs alleged that the IonQ and dMY Technology Group merger in October 2021 misled investors about IonQ's technology, and that IonQ concealed that a third party was the source of its bookings – as opposed to cloud-based customers – in an effort to keep share prices high and further deceive investors. The lead plaintiff's complaint relied on allegations from one confidential witness and a report by short-selling specialist Scorpion Capital. Published in May 2022, about six months after IonQ's initial public offering, the report disclosed that Scorpion Capital had opened a short position on IonQ and asserted that the company's claims about the existence of its quantum computing systems and related technological advances were false, according to interviews with unidentified former employees and experts in the field.
US District Judge Deborah L. Boardman ruled on September 29, 2023, that the lead plaintiffs failed to state a claim, holding that they could not demonstrate that the analysts who authored the Scorpion Capital report or the former IonQ employee who gave testimony were reliable sources of information. The court also found that the lead plaintiffs failed to sufficiently plead that the defendants knowingly made misrepresentations about the company's quantum computing technology – or that investors suffered losses as a result. The court dismissed the complaint with prejudice.
The case is Leacock v. IonQ Inc., et al. before the US District Court for the District of Maryland (8:22-cv-01306).
The victory earned the Cooley team a Litigator of the Week accolade in The American Lawyer's Litigation Daily column.
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