In affirming the dismissal of a class action suit against health services company Cigna, the U.S. Court of Appeals for the Second Circuit took the opportunity to address what it called “a creative attempt to recast corporate mismanagement as securities fraud.”

Second Circuit Judge José Cabranes, writing for the panel, continued: “The attempt relies on a simple equation: first, point to banal and vague corporate statements affirming the importance of regulatory compliance; next, point to significant regulatory violations; and voila, you have alleged a prima facie case of securities fraud!”