At

1 SCOTT + SCOTT LLP EARTHUR L. SHINGLER III (181719)

2 MARY K. BLASY (211262) 09 HAY .1 I PH 2: 04600 B Street, Suite 1500

3 San Diego, CA 92101 Pe . I; r..1-..fe,T =IR T

Telephone: 619/233-4565 )„0-,?,161LTAN:F WA."4 ,0,

4 619/233-0508(fax)ashingler@scott-scott.com Y

FPI/5 — and —

DAVID R. SCOTT (CT16080)6 P.O. Box 192

108 Norwich Avenue7 Colchester, CT 06415

Telephone: 860/537-38188 860/537-4432 (fax)

drscott@scott-scott.com9

Counsel for Plaintiff

•Ct11 UNITED STATES DISTRICT COURT

12 SOUTHERN DISTRICT OF CALIFORNIACAD

13909 cv 1013 L RBB

cZ AARON MAGEL, Trustee of the Magel Family Civ. No. • - - • • • — - -CD 14 Trust A Dated 1/2/90, Individually and on Behalf

of All Others Similarly Situated, , CLASS ACTION 15

Plaintiff,16 COMPLAINT FOR VIOLATIONS OF

VS. THE FEDERAL SECURITIES LAWS17„ SEQUENOM, INC., HARRY F. HIXSON, JR.,

I ° HARRY STYLLI and PAUL W. HAWRAN, DEMAND FOR JURY TRIAL

19 Defendants.

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COMPLAINT

tal , •1 NATURE OF THE ACTION

2 1. Plaintiff, Aaron Magel, Trustee of the Magel Family Trust A Dated 1/2/90

3 ("Plaintiff'), individually and on behalf of all other persons similarly situated, by Plaintiffs

4 undersigned attorneys, for Plaintiff's complaint against Defendants, alleges the following based upon

5 personal knowledge as to Plaintiff and Plaintiff's own acts, and upon information and belief as to all

6 other matters based on the investigation conducted by and through Plaintiff's attorneys, which

7 included, among other things, a review of Securities and Exchange Commission ("SEC") filings by

8 Sequenom, Inc. ("Sequenom" or the "Company"), as well as media reports about the Company.

9 Plaintiff believes that substantial evidentiary support will exist for the allegations set forth herein

10 after a reasonable opportunity for discovery.

11 2. This is a securities class action on behalf of all persons or entities who acquired the

12 securities of Sequenom between June 4, 2008 and April 29, 2009, inclusive (the "Class Period"),

13 including purchasers in Sequenom's July 1, 2008 registered stock offering, seeking remedies under

14 the Securities Exchange Act of 1934 (the "Exchange Act").

15 JURISDICTION AND VENUE

16 3. Jurisdiction is conferred by §27 of the Exchange Act. The claims asserted herein

17 arise under §§10(b) and 20(a) of the Act and Rule 10b-5. This Court has jurisdiction over the

18 subject matter of this action under 28 U.S.C. §§1331 and 1337, and §27 of the Exchange Act.

19 4. Venue is proper in this District pursuant to §27 of the Exchange Act and 28 U.S.C.

20 §1391(b). Sequenom is headquartered in and conducts business in this District.

21 5. In connection with the acts alleged in this Complaint, Defendants, directly or

22 indirectly, used the means and instrumentalities of interstate commerce, including, but not limited to,

23 the mails, interstate telephone communications and the facilities of the national securities markets.

24 PARTIES

25 6. Plaintiff Aaron Magel, Trustee of the Magel Family Trust A Dated 1/2/90, as set forth

26 in the accompanying certification, which is incorporated by reference herein, purchased the common

27 stock of Sequenom at artificially inflated prices during the Class Period and has been damaged

28 thereby.

- 1 - COMPLAINT s

• 1 7. Defendant Sequenom, Inc. ("Sequenom") is a diagnostic testing and genetics analysis

2 company headquartered in San Diego. The Company is focused on providing products, services,

3 diagnostic testing, applications and genetic analysis products that translate the results of genomic

4 science into solutions for biomedical research, translational research, molecular medicine

5 applications, and agricultural, livestock and other areas of research. Its development and

6 commercialization efforts in various diagnostic areas include non-invasive prenatal diagnostics,

7 oncology, infectious diseases and other disorders. The Company claims to be researching,

8 developing and pursuing the commercialization of various non-invasive molecular diagnostic tests

9 for prenatal genetic disorders and diseases, oncology, infectious diseases, and other diseases and

10 disorders. As of February 2, 2009, there were 60,977,461 shares of Sequenom's common stock

11 issued and outstanding which trade on the Nasdaq under the symbol "SQNM."

12 8. Defendant Harry F. Hixson, Jr. ("Hixson") has been Chairman of the Board and Chief

13 Executive Officer ("CEO") of Sequenom since 2003. Hixson prepared, reviewed and approved all

14 Class Period public statements Sequenom made and/or filed with the SEC, including the registration

15 statement for the Offering.

16 9. Defendant Harry Stylli ("Stylli") has been President and Chief Operating Officer and

17 a Director of Sequenom since 2005. Stylli prepared, reviewed and approved all Class Period public

18 statements Sequenom made and/or filed with the SEC, including the registration statement for the

19 Offering.

20 10. Defendant Paul W. Hawran ("Hawran") has been Sequenom's Chief Financial Officer

21 since 2007 and was a director of Sequenom for a year before that. Hawran prepared, reviewed and

22 approved all Class Period public statements Sequenom made and/or filed with the SEC, including

23 the registration statement for the Offering.

24 11. The Defendants referenced above in lifg 8-10 are referred to herein as the "Individual

25 Defendants."

26 12. During the Class Period, the Individual Defendants, as senior executive officers

27 and/or directors of Sequenom, were privy to confidential and proprietary information concerning

28 Sequenom, its operations and its clinical and sales programs. Because of their positions, the

-2 - COMPLAINT

•1 Individual Defendants had access to material information available to them but not to the public.

2 Each of the Individual Defendants knew that the adverse facts specified hereinafter had not been

3 disclosed to and were being concealed from the public and that affirmative representations by the

4 Company specified hereinafter were materially false and misleading. The Individual Defendants are

5 liable for the false statements pleaded herein, as the statements were either made by a particular

6 Individual Defendant or were "group-published" information, the result of the collective actions of

7 the Individual Defendants.

8 13. In addition to their direct participation in the wrongs complained of herein, the

9 Individual Defendants, by reason of their status as senior executive officers and/or directors, were

10 "controlling persons" within the meaning of § 20(a) of the Exchange Act and had the power and

11 influence to cause the Company to engage in the unlawful conduct complained of herein. Because

12 of their positions of control, the Individual Defendants were able to and did, directly or indirectly,

13 control the conduct of Sequenom's business.

14 14. The Individual Defendants, because of their positions with the Company, controlled

15 and/or possessed the authority to control the contents of the Company's press releases to the

16 investing public. The Individual Defendants were provided with copies of the Company press

17 release, prior to or shortly after its issuance, that, as more particularly alleged hereinafter, was

18 misleading, and they had the ability and opportunity to prevent its issuance or cause it to be

19 corrected. Thus, the Individual Defendants had the opportunity to commit the fraudulent acts

20 hereinafter alleged.

21 15. As senior executive officers and/or directors and as controlling persons of a publicly

22 traded company whose common stock is registered with the SEC pursuant to the Exchange Act, and

23 is traded on the Nasdaq and governed by the federal securities laws, the Individual Defendants had a

24 duty to promptly disseminate accurate and truthful information with respect to Sequenom's clinical

25 programs, and to correct any previously issued statements that had become materially misleading or

26 untrue, so that the market price of Sequenom's common stock would be based upon truthful and

27 accurate information. The Individual Defendants' misrepresentations and omissions during the Class

28 Period violated these specific requirements and obligations.

- 3 - COMPLAINT

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1 16. The Individual Defendants are liable as participants in a fraudulent scheme and

2 course of conduct that operated as a fraud or deceit on purchasers of Sequenom's common stock by

3 disseminating materially false and misleading statements and/or concealing material adverse facts.

4 The scheme deceived the investing public regarding Sequenom's clinical and sales programs, and

5 thus the intrinsic value of Sequenom's common stock, and caused Plaintiff and members of the Class

6 (defined below) to purchase Sequenom's common stock at artificially inflated prices.

7 BACKGROUND TO THE CLASS PERIOD

8 17. Down syndrome is a chromosomal abnormality characterized by the presence of an

9 extra copy of genetic material on the 21st chromosome. The effects of the extra copy vary greatly

10 among people, depending on the extent of the extra copy, genetic history and pure chance. It is

11 estimated that approximately 70%, or 2.8 million, women undergo Down syndrome screening in the

12 United States each year.

13 18. In 2007, the American College of Obstetricians and Gynecologists ("ACOG")

14 endorsed guidelines that offer risk assessment to all pregnancies for fetal chromosomal

15 abnormalities, including Down syndrome. According to Defendants' Class Period statements, the

16 ACOG recommendation includes screening before the 20th week of pregnancy using a less-invasive

17 screening option that includes ultrasound in conjunction with the measurement of certain blood

18 hormones.

19 19. In December 2007, the Company, through its laboratory partner, introduced a

20 laboratory-developed RhD incompatibility test using RT-PCR in the United States.

21 20. In February 2008, Sequenom announced progress with its noninvasive Trisomy 21

22 test based on multiple RNA fetal markers, including the PLAC4 gene as previously published by Dr.

23 Dennis Lo, Chinese Hong Kong University. According to Defendants' Class Period statement, Tin

24 these preliminary studies, data from more than 100 clinical plasma specimens of various ethnicities

25 indicated that the development-stage Trisomy 21 test was approaching 85% (+/- 5%) ethnic

26 coverage, more than 95% sensitivity and close to 99% specificity."

27 21. Defendants also emphasized during the Class Period that the Company's noninvasive

28 circulating cell-free fetal (cern nucleic acid ("SEQureDx Technology") presented a "novel approach

- 4 - COMPLAINT

- •1 to genetic screening." Unlike other methods of harvesting placental tissue cells as is required for

2 entering the uterus to sample the amniotic fluid surrounding the baby as is performed with

3 amniocentesis, SEQureDx Technology extracts Fetal Nucleic Acid material from a simple blood

4 specimen collected from the mother to determine the genetic status of the fetus.

5 22. According to the Company's June 4, 2008 press release announcing the positive

6 results from screening studies using SEQureDx (TM) Technology, the "breakthrough suggests that

7 effective screening may be accomplished in the future without the risks associated with disturbing

8 the amniotic fluid that surrounds the baby in the uterus." The majority of the Company's market

9 value was tied to the market viability of the SEQureDx prenatal tests, projected to have a huge

10 market.

11 SUBSTANTIVE ALLEGATIONS

12

23. The Class Period commences on June 4, 2008. On that day, the Company issued a

13 release entitled "Sequenom Announces Results of Screening Studies for Down Syndrome and

14 Updates Development of Noninvasive Prenatal Diagnostics at Analyst and Investor Briefing." The

15 release stated in relevant part that:16

Sequenom, a leading provider of genetic-analysis solutions,17 announced positive results from screening studies using the

Company's noninvasive circulating cell-free fetal (ccffi nucleic acid18 SEQureDx(TM) Technology, which enables the detection of fetal

aneuploidy, including Down syndrome from maternal blood. At its19 analyst-and-investor briefing "The Future of Noninvasive Prenatal

Diagnostics" held at the International Society of Prenatal Diagnostics20 (ISPD) conference in Vancouver, Canada, executives were joined by

a panel of leading scientists and clinicians to discuss study results and21 updates in the development of noninvasive prenatal diagnostics.

22 The Company reported that in blinded studies performed atSequenom involving approximately 200 clinical samples collected

23 both prospectively and retrospectively, its proprietary test for Downsyndrome correctly identified 100% of all Down syndrome samples

24 (Le. sensitivity or detection rate), without any false-positiveoutcomes (Le. specificity). Population coverage for the T21 test

25 improved to at least 93% of the U.S. population. With currentlyavailable serum-testing options having detection rates between 70%

26 to 90% and false-positive rates as high as 5%, SEQureDxTechnology shows promise for significant performance advantages

27 over the current paradigms for prenatal screening. The Companyexpects to continue its development activities through the end of

28 2008, at which time the Company will initiate transfer of the

- 5 - COMPLAINT

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1 technology to laboratory partners. The Company plans to initiate amulti-site validation study consisting of several thousand samples in

2 the fourth quarter this year and launch its Down syndrome test as aLaboratory Developed Test (LDT) in the U.S. in the first half 2009.

3 "We are very pleased to be reporting substantial progress toward

4 commercializing an important test to screen for Down syndromethat can be administered as early as late in the first trimester

5 through a simple blood draw from the mother," said Harry Stylli,Ph.D., Sequenom's President and Chief Executive Officer. "Data

6 from our blinded screening study for the detection of fetalaneuploidy indicate that the current version of our test has

7 identified all Down syndrome samples without any false-positiveoutcomes. Also our coverage has improved to at least 93% of the

8 U.S. population. Although these results require further validationin larger studies, such results using SEQureDxTM Technology can

9 potentially transform current clinical practice for Down syndrome-risk assessment "

10 The studies conducted both prospectively and retrospectively,involved approximately 200 samples in both normal and high-risk

11 patients. The blinded-prospective study involved 180 samplescomprising 130 low-risk and 50 high-risk samples. The test correctly

12 identified three Down syndrome samples without any false-positiveoutcomes. Of the 21 blinded samples analyzed retrospectively, the

13 test correctly identified seven Down syndrome samples while alsoindicating no false-positive results.

14 "A direct, noninvasive genetic assessment of fetal Down syndrome

15 will result in far-better screening accuracy and would dramaticallyreduce the number of unnecessary, invasive diagnostic procedures

16 that women undergo in current maternal serum-screening protocols.Improved detection rates, as reported by Sequenom in its assay

17 optimization studies, exceed those with currently availablescreening models," said Allan T. Bombard, M.D., a reproductive

18 geneticist with more than two decades of experience in the field ofprenatal screening and diagnosis. (Dr. Bombard serves as a Chief

19 Medical Director at Sharp Mary Birch Hospital and is the PrincipalInvestigator of the study.) "Moreover, having minimum false-

20 positive results will significantly reduce the number of unnecessaryconfirmatory diagnostic tests, as well as the anxiety and

21 complications associated with invasive procedures."Currently available tests conducted during the first or second

22 trimester of pregnancy use epigenetic markers associated with theDown syndrome phenotype that are characterized as "surrogate"

23 markers as they are not directly related to the extra Number 21chromosome. Different combinatiOns of markers, measured at

24 different times in pregnancy, constitute the multiple-marker approachto screening. These tests have detection rates of 70% to 90% with

25 approximately a 5% false-positive rate, while also having inconsistentpopulation coverage or ethnicity rates. The SEQureDx test uses a

26 maternal blood sample drawn as early as the first trimester andidentifies directly the extra Number 21 chromosome. Invasive

27 procedures such as amniocentesis or chorionic villus sampling (CVS)carry risk of miscarriage and other risks to mother and fetus.

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-6 - COMPLAINT

• •1 "Current screening methods, using multiple 'surrogate' markers, are

very good, but are unlikely to reach diagnostic potential," said Jacob2 Canick, Ph.D., Professor of Pathology and Laboratory Medicine at

Brown University Medical School. "In contrast, lam optimistic that3 tests using multiple-fetal RNA and DNA markers can be developed

not only for Down syndrome, but for all clinically important4 aneuploidies, and it is reasonable to expect that such direct,

noninvasive diagnostics could be done in the first trimester of5 pregnancy.

6Sequenom's analyst-and-investor-briefing event speakers includedAlan Bombard, M.D., Chief Medical Officer at Sharp Mary Birch

7Hospital, who discussed current clinical practices for Downsyndrome screening and diagnosis; Jacob Canick, Ph.D., Professor of

8Pathology and Laboratory Medicine at Brown University MedicalSchool, who discussed methods for screening pregnancies for Down

9syndrome; Professor Dennis Lo, consultant to Sequenom and aleading researcher in prenatal diagnostics, who discussed the figure of

10prenatal diagnosis; and Sequenom's Senior Vice President ofResearch and Development Elizabeth Dragon, Ph.D., who reviewed

11progress with Sequenom's SEQureDx Technology in developing atest for Down syndrome. A webcast of the event is available on the

12Company Web site at www.sequenom.com .

[Emphasis added.]13

24. On this news the Company's stock price spiraled up from its close of $ 7.66 on June14

3, 2008 to close at $ 9.33 on June 4th on unusually high trading volume of over 9 million shares15

trading, and to $11.15 per share on June 5th on volume of over 6 million shares trading.16

25. On June 23, 2008, Sequenom announced that it had filed a preliminary prospectus17

supplement to an automatically effective shelf registration statement with the SEC relating to a18

proposed public offering of 5,500,000 shares of its common stock in an offering to be underwritten19

by Lehman Brothers Inc. and UBS Investment Bank as joint book-running managers and Leerink20

Swann & Co., Lazard Capital Markets LLC, Oppenheimer & Co., Inc. and Rodman & Renshaw,21

LLC as co-managers (the "Offering").22

26. By June 26, 2008, Sequenom's stock price had climbed to above $15 per share on23

defendants false but positive statements. The Company announced the prospectus had been declared24

effective and priced the stock Offering at $15.50 per share.25

27. On July 2, 2008 Sequenom announced the Offering had been a success and that the26

underwriters had exercised in full their option to purchase an additional 825,000 shares of its27

common stock. Including the additional shares being purchased, the Offering totaled 6,325,00028

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1.1 \•

1 shares at a public Offering price of $15.50 per share, resulting in net proceeds to Sequenom of

2 approximately $92 million (after deducting the underwriting discounts and commissions and other

3 estimated Offering expenses).

4 28. On July 30, 2008, Sequenom issued a release entitled "Sequenom Reports 2008

5 Second Quarter Financial Results." The release stated in relevant part that:

6

Sequenom, Inc., a leading provider of molecular diagnostic applications and geneticanalysis products and services, today reported financial results for the three months

7 and six months ended June 30, 2008.

8

Sequenom reported revenues for the second quarter of 2008 of $12.8 million, anincrease of 25%, compared with revenues of $10.2 million for the second quarter of

9

2007..... The net loss for the second quarter of 2008 was $9.7 million, or $0.21 pershare, compared with $4.8 million, or $0.13 per share, for the second quarter of 2007.

10* * * *

11"We have taken major steps toward the introduction of our noninvasive prenatal

12

test for Down syndrome, based on our SEQureDx(TM) technology," commentedHarry Stylli, Ph.D., President and Chief Executive Officer of Sequenom. "On June

13

3 at the International Society of Prenatal Diagnostics conference in Vancouver, weannounced study results involving 200 normal and high-risk samples. The results

14

showed that we correctly identified all Down samples, with no false-positives. Thiscompares to current screening tests that have detection rates of 70% to 90% with

15

approximately 5% false-positives. We are currently focused on analyzing firsttrimester samples to validate the applicability of our Down syndrome test for first

16 trimester screening.

17 * * * *

18 2008 Second Quarter and Recent Highlights

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— Down Syndrome Screening Study Results: In early June, we announcedpositive results from screening studies using our noninvasive circulating

20

cell-free fetal (ccff) nucleic acid SEQureDx technology, which enables thedetection of fetal aneuploidy, including Down syndrome from maternal

21

blood. We reported that in blinded studies performed at Sequenominvolving approximately 200 clinical samples collected both prospectively

22

and retrospectively, our proprietary test for Down syndrome correctlyidentified all Down syndrome samples, without any false-positive outcomes.

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Currently available serum-testing options having detection rates between70% to 90%, and false-positive rates as high as 5%.

24-- $92.0 Million Public Offering: In early July we completed an underwritten

25

public offering of 6,325,000 shares of company stock, including the exercisein full of the underwriters' option, resulting in net proceeds to the Company

26

of approximately $92.0 million. Lehman Brothers Inc. and UBS InvestmentBank were joint book-running managers for the offering. The co-managers

27

were Leerink Swann, Lazard Capital Markets LLC, Oppenheimer & Co., Inc.and Rodman & Renshaw, LLC.

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1 * * * *2 -- Investment Community Presentations: In June Sequenom held an analyst-

and-investor briefing, "Sequenom: The Future of Noninvasive Prenatal3 Diagnostics," which included presentations from Company management and

distinguished speakers including:4

-- Allan T. Bombard, M.D., Chief Medical Officer, Sharp Mary Birch5 Hospital; Adjunct Professor, Obstetrics and Gynecology/SUNY Downstate

Medical Center; Clinical Professor, Albert Einstein College of Medicine6

-- Jacob Canick, Ph.D., Professor of Pathology and Laboratory Medicine,7 Brown University Medical School

8 -- Dennis Lo, Ph.D., consultant to Sequenom

9 Additionally, management presented at the Rodman & Renshaw 5" AnnualGlobal Healthcare Conference in May and at the 7th Annual Needham & Company

10 Biotechnology & Medical Technology Conference in June.

11 Updated 2008 Financial Guidance

12 Sequenom is updating its full year 2008 financial guidance as follows:

13 — Revenue guidance remains unchanged and is expected to be $50

14to $53 million, representing about 30% growth over 2007 revenues;

— Net loss is expected to be $34 to $36 million as compared to15 the previously announced guidance of $3010 $33 million; the

expected increased loss is primarily reflective of increased16 stock-based compensation expenses due to the recent increase

in our stock price in conjunction with new employee stock17 option awards, as well as projected legal expenses; and

18 — Cash burn is expected to be approximately $30 million ascompared to the previously announced guidance of $26 to $28

19 million.

20 [Emphasis added.]

21 29. After the close of trading on September 23, 2008, Sequenom issued a release entitled

22 "Sequenom Announces Additional, Positive Results for Down Syndrome Test at Analyst Briefing -

23 Management Joined by Leading Scientists and Clinicians to Discuss Study Results and Other

24 Business Updates," which stated in relevant part that:

25 Sequenom Inc., a leading provider of genetic-analysis and molecular diagnosticsolutions, announced additional, positive results from screening studies using the

26 Company's noninvasive circulating cell-free fetal (ccff) nucleic acidSEQureDx(TM) Technology, which enables the detection of fetal aneuploidy,

27 including Down syndrome from maternal blood, at its Analyst Briefing in NewYork City. Among the data presented, Sequenom's test demonstrated complete

28 concordance with clinical results (no false positives and no false negatives) in both

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• •

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first and second trimester samples (over 200 samples announced today and inexcess of 400 prospective samples to-date). Sequenom executives were joined by a

2

panel of leading scientists and clinicians to discuss these study results and updates inthe development of noninvasive prenatal diagnostics.

3"These data expand upon the data we announced in June and underscore the

4

potentialfor our SEQureDx Technology to transform current clinical practice forprenatal diagnostics as a primary screening tool for Trisomy 21. Furthermore,

5

these results support the potentialfor our test to be used in the first trimester," saidHarry Stylli, Ph.D., Sequenom's President and Chief Executive Officer. "In

6

addition, our announcement earlier today regarding our acquisition of the Center forMolecular Medicine, a CLIA-certified molecular diagnostics laboratory, and our

7

partnership with Spectrum Health and the Van Andel Research Institute, provides uswith important infrastructure and commercialization control. We are delighted with

8

our progress in bringing to market an important, noninvasive screening test forDown syndrome, as well as a broader menu of molecular diagnostic tests. These

9

results are very promising, and we look forward to continuing the clinicaldevelopment and validation progress to launch in the first half of 2009."

10Elizabeth Dragon, Ph.D., Senior Vice President of Research and Development at

11

Sequenom, presented datafrom blinded studies performed at Sequenom involving219 new clinical samples collected prospectively, showing that its proprietary test

12

for Down syndrome correctly identified 100% of all Down syndrome samples (i.e.sensitivity or detection rate), without any false-positive outcomes (Le. specificity).

13

The SEQureDx prototype test also demonstrated its ability to correctly identify aDown syndrome positive sample in thefirst trimester, confirmed by chorionic villas

14

sampling (CVS), a current testing standard that requires the harvesting ofplacental tissue cells.

15Sequenom indicated that with the addition of new SNPs in PLAC4 and a recently

16

discovered gene, the SEQureDx Trisomy 21 test should increase its coverage from93% to greater than 95% in the US population. The Company has also identified

17

novel markers for Trisomy 18 that have passed its initial selection criteria, and otherchromosomes, and intends to develop these markers into new tests.

18The Company expects to continue its current development activities through the

19

end of 2008, at which time the Company will initiate a multi-site 3,00010 5,000-sample laboratory developed test (LDT) validation study, which is expected to be

20

completed and submitted for publication at the time of the anticipated commerciallaunch in June 2009. To facilitate the LDT validation study, Sequenom also

21

indicated that the company will be collaborating with new clinical partners whoperform in excess of 12,000 amniocenteses and 3,000 CVS per year. In addition,

22

Sequenom announced sponsorship of the RNA Noninvasive Aneuploidies ("RNA")study, a landmark, multi-center, prospective study involving up to 10,000 samples

23

from first and second trimester pregnancies using the SEQureDx technology,managed and analyzed by an independent third-party.

24During the Analyst Briefing, management also highlighted key upcoming milestones

25 for the prenatal diagnostics business, including:

26 -- Confirm 10-week or earlier gestational age testing

27 -- Evaluate integration of T18 (Edward's syndrome) assay into thefirst generation test

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• •

1 -- Initiate T21 LDT clinical validation study evaluating 3,000 to5,000 samples

2-- Complete T21 testing of up to 800 additional high prevalence

3 specimens by year-end 2008

4 -- Initiate "RNA" multi-center study involving 10,000 highprevalence patient samples

5— Submission of key data for publication

6— Commercial launch of T21 test in first half of 2009

7Sequenom's analyst briefing included the following speakers and topics:

8-- Harry Stylli, Ph.D., Chief Executive Officer, Sequenom

9 Business Overview and Update

10 -- Charles R. Cantor, Ph.D., Chief Scientific Officer, Newapplications of the Sequenom Platform

11Yury IChudyakov, Ph.D., Chief, Molecular Epidemiology and

12 Bioinformatics Laboratory, Division of Viral Hepatitis,Centers for Disease Control and Prevention, Novel Molecular

13 Technologies for Public Health

14 -- Betty Dragon, Ph.D., Senior Vice President, R&D, NoninvasivePrenatal Detection of Genetic Abnormalities Using SEQure

15 Dx(TM) Technology

16 -- Daniel H. Farkas, PhD, HCLD, FACB, Executive Director, Centerfor Molecular Medicine, Real-world Genetic Testing:

17 Translating Science Into Routine Clinical Tests

18 -- Gary S. Riordan, Vice President, Regulatory Affairs andQuality, FDA Regulatory Environment

19-- Jacob A. Canick, Ph.D., Professor of Pathology and Laboratory

20 Medicine, Brown University Medical School, Design AndImplementation of a Landmark, Multicenter, Prospective

21 Clinical Study To Validate The Safe And Accurate Detection OfDown Syndrome Using SEQure Dx(TM) Technology

22-- Allan T. Bombard, M.D., FACOG, FACS, FACMG, reproductive

23 geneticist, Chief Medical Officer, Sharp Mary Birch Hospital,Are We Facing a Revolution in Noninvasive Prenatal Genetic

24 Diagnostics?

25 [Emphasis added.]

26 30. On these additional false but positive statements, the Company's stock price spiraled

27 up from its close of $20.56 on September 3, 2008 to close at $27.76 on September 4th on unusually

28 high trading volume of over 9.4 million shares trading.

- 11 - COMPLAINT

t

• •

1 31. On October 30, 2008, the Company issued a release entitled "Sequenom Reports

2 2008 Third Quarter Financial Results - Company Achieved Significant Milestones in Development

3 of Proprietary Down Syndrome Test; Company Affirms 2008 Revenue Guidance." The release

4 stated in relevant part:

5 Sequenom, Inc., a leading provider of molecular diagnostic applications and geneticanalysis products and services, today reported financial results for the three and nine

6 months ended September 30, 2008.

7 "During the third quarter we rapidly advanced our paradigm-shifting approach toDown syndrome screening and reinforced our significant leadership in the

8 noninvasive prenatal diagnostics space," stated Harry Stylli, Ph.D., President andChief Executive Officer of Sequenom. "Specifically, we announced complete

9 clinical concordance with the results from our Trisomy 21 technology in more than400 maternal blood samples analyzed to date. In addition, we secured additional

10 intellectual property to further enhance our already signcant proprietaryposition in noninvasive prenatal diagnostics, and we signed a definitive agreement

11 to acquire the Center for Molecular Medicine (CMAV, a state-of-the-art CLIA-certified laboratory. Upon completion of the CMM acquisition, CMM will be

12 positioned to launch RHD and Fetal (XV tests in the first quarter of 2009,followed by the Trisomy 21 test by mid-year. We look forward to continuing this

13 progress in the quarter and year ahead."

14 Sequenom reported total revenues for the third quarter of 2008 of $11.6 million, anincrease of 18%, compared with total revenues of $9.8 million for the third quarter of

15 2007 The net loss for the third quarter of 2008 was $10.4 million, or $0.18 pershare, compared with the net loss for the third quarter of 2007 of $5.5 million, or

16 $0.14 per share.

17 "We are pleased with our results for the quarter, remain cautiously optimistic forthe fourth quarter, and are reaffirming our full year 2008 revenue guidance of

18 $50.0 million," said Dr. Stylli. "We expect the Genomic Analysis business segmentwill reach cash flow break-even during 2009 with current growth rates and

19 operational leverage. We believe we have sufficient capital to commercialize ournoninvasive prenatal tests and turn profitable on a consolidated basis in 2010 or

20 2011 without further equity financing requirements."

21 * * * *

22 Updated 2008 Financial Guidance

23 Sequenom is updating its 2008 financial guidance as follows:

24 -- The Company affirms its expectation for total 2008 revenues tobe approximately $50 million.

25-- Net loss is expected to be approximately $39 million, up from

26 prior guidance of $36 million, due to costs expected inconnection with the acquisition of the CLIA-certified

27 laboratory (CMM) and other licensing activities.

28

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• •

1 -- Cash burn is expected to be approximately $36 million,compared with prior guidance of approximately $30 million, due

2 to the expected completion of the acquisition of theCLIA-certified laboratory (CMM) and related capital

3 expenditures required to prepare the laboratory for largevolume commercialization, and intellectual property related

4 expenses, among other expenses.

5 2008 Third Quarter and Recent Highlights

6 — Further Positive Results from Down Syndrome Screening Study:In late September Sequenom announced additional positive

7 results from screening studies for detection of fetalaneuploidy, including Down syndrome, from maternal blood using

8 Sequenom's noninvasive circulating cell-free fetal (ccff)nucleic acid SEQureDx Technology. At the Analyst and Investor

9 Briefing, Sequenom presented data demonstrating completeconcordance with clinical results (no false positives and no

10 false negatives) in both first and second trimester samplesfrom an additional 200 (400 in total) prospective samples.

11[Emphasis added.]

1232. On December 1, 2008, the Company issued a release entitled "Next-Generation

13Noninvasive Diagnostic Technology Shown to Accurately Detect Fetal Down Syndrome in First

14Trimester of Pregnancy," which stated in relevant part that:

15Sequenom, Inc. announced new data from a collaborative project with The Chinese

16 University of Hong Kong, published this week in the Early Edition of theProceedings of the National Academy of Sciences, that demonstrate its innovative,

17 next-generation, noninvasive prenatal diagnostic technology accurately quantifiedmaternal plasma DNA sequences for fetal Trisomy 21, or Down syndrome, based on

18 samples taken from women in the first and second trimesters of pregnancy. Thesedata are the first to suggest that this future approach, based on massively parallel

19 genomic DNA sequencing, can be effective in women who had not previouslyundergone invasive procedures.

20This study used massively parallel genomic sequencing to quantify maternal plasma

21 DNA sequences for the noninvasive prenatal detection of Down syndrome, assessingsamples from 28 women in the first and second trimesters of pregnancy. All 14

22 Down syndrome fetuses and normal fetuses were correctly identified at these earlystages.

23"Current invasive methods for diagnosing Down syndrome in pregnancy have

24 documented risks associated with such procedures. Our new study using massivelyparallel genomic DNA sequencing represents a 'next-generation' technology for

25 noninvasive, safe testing of Down syndrome. This is the first study to show that thisapproach can be used for the detection of Down syndrome in both the first and

26 second trimesters, based on a rigorously controlled clinical cohort in which thepregnant women with fetuses affected by Trisomy 21 and those with normalfetuses

27 were matched in gestational age, and in which most of the studied subjects had notpreviously undergone an invasive procedure. The latter point is important as it

28 shows that the method would truly work in the noninvasive prenatal diagnostic

- 13 - COMPLAINT

• •

1 scenario. This study also employs a novel data analysis algorithm which hasachieved an unprecedented clear separation of the Trisomy and normal samples,"

2 stated Dennis Lo, M.D., Ph.D., co-author of the study, and Li Ka Shing, Professorof Medicine at The Chinese University of Hong Kong. "While this new approach is

3 several years away as a commercially viable test, we believe that massively parallelgenomic sequencing of DNA in maternal plasma may offer a complementary

4 approach to the RNA SNP allelic ratio approach that we reported last year forTrisomy 21 detection. The two approaches have performance and cost profiles

5 which would potentially be synergistic to one another."

6 Sequenom licensed the exclusive rights to the massively parallel genomic DNAsequencing technology featured in this study from The Chinese University of Hong

7 Kong in September 2008.

8 "Screening tests currently available for early detection of Down syndrome andother chromosomal disorders are associated with a relatively high rate of

9 inaccuracy, which can result in an overlooked abnormality or, in the case offalsepositive results, unnecessary invasive and risky procedures," stated Harry Stylli,

10 Ph.D., President and Chief Executive Officer of Sequenom. "Systems to supportDNA sequencing like massively parallel genomic sequencing or shotgun

11 sequencing are currently limited to the academic setting due to scalabilitylimitations and high cost, therefore practical applications are several years from

12 commercialization. We find the data reported by Dr. Lo and associates to be verycompelling and, while we continue to evaluate other promising approaches,

13 Sequenom licensed this technology several months ago because we believemassively parallel genomic sequencing is a promising approach to prenatal

14 diagnostics that may offer a future extension to our SEQureDx(TM) prenataldiagnostics franchise. Even though this technology is years away from the clinic,

15 we expect that our current RNA SNP allelic ratio technology - which is the basisfor the Down syndrome test we expect to launch in June 2009 - will represent a

16 major step forward in maternal and fetal testing."

17 Current screening technology for Down syndrome includes serum marker analysis,such as the quad screen and first trimester combined screening that employs both

18 serum marker testing and nuchal translucency. These approaches have detection orsensitivity rates of 80% and 85% respectively, which means between 15% and 20%

19 of all Down syndrome-affected pregnancies will not be identified as needingfurther evaluation. In addition, these approaches also have false positive rates

20 between 5% and 10%, resulting in hundreds of thousands of unnecessary, highlyinvasive CVS or amniocentesis procedures. These invasive procedures, which are

21 used to determine whether the fetus has Down syndrome, carry a risk ofmiscarriage in the range of one-in-100 to one-in-300.

22[Emphasis added.]

2333. On January 28, 2009, the Company issued a release entitled "Sequenom Announces

24New Positive Data on Down Syndrome Detection and Unveils Breakthrough DNA Approach to

25Prenatal Diagnostics," which stated in relevant part that:

26Sequenom, Inc. today announced new positive data from the prospective clinical

27 studies using the Company's noninvasive SEQureDxTM technology, enabling thedetection of fetal aneuploidy from maternal blood. The data presented today

28 consist of 459 new, high prevalence samples from the prospective, blinded studies

- 14 - COMPLAINT

• •,

1 performed at Sequenom, bringing the total number of samples studied to 858.Based on the results from the total study samples, including samples as early as 8

2 weeks of pregnancy, the Sequenom SEQureDx RNA-based technologydemonstrated a 100% positive predictive value (PP9 and a 99.9% negative

3 predictive value (NPV). The SEQureDx technology achieved a better than 99%detection rate, with less than a 1% false positive rate. The current standard of care,

4 screening tests, perform at less than a 99% detection rate; however, statistically, ifthese screening tests could perform at a 99% detection rate, theirfalse positive rate

5 would be in the 10% to 25% range. SEQureDx compares favorably to the currentinvasive procedures, such as amniocentesis.

6In addition to data on the RNA-based technology, the Company unveiled a

7 breakthrough technology which further enhances Sequenom's SEQureDxtechnology. This new DNA approach has demonstrated in early studies universal

8 ethnic coverage, high sensitivity and speccity, and the ability to detect Trisomy 21(Down syndrome), Trisomy 18 (Edwards syndrome) and Trisomy 13 (Patau

9 syndrome) in a single test. This technology is being developed as a "reflex test"forunresolved results from the current SEQureDx Trisomy 21 technology will be

10 available at the time of the launch of the Trisomy 21 laboratory developed test(LDT) in June 2009.

11"We are very pleased with the completion of the R&D studies for our Trisomy 21

12 RNA-based technology," stated Harry Stylli, Ph.D., President and Chief Executive'Officer of Sequenom. "Our highly sensitive and specific Down syndrome

13 technology will be transferred to the Sequenom Center for Molecular Medicine(SCMM) to complete the development and validation phases necessary for launch

14 in June as an LDT. Our pioneering DNA approach is proving to be a powerfulapproach to detecting a wide range of aneuploidies. We are very excited by these

15 early findings and believe it will play a key role in our prenatal diagnosticsfranchise as ft eliminates unresolved results due to ethnic coverage and has shown

16 sensitivity as early as eight weeks, similar to the current RNA approach.Furthermore, we believe it will have broad applicability in other areas such as

17 cancer aneuploidies and other genetic disorders. This new approach and otherapproaches being developed by the Company are covered by existing and recently

18 filed patents."

19 Overview of Data from Screening Studies Evaluating RNA-based Trisomy 21Technology

20Elizabeth Dragon, Ph.D., Senior Vice President of Research and Development at

21 Sequenom, presented data from blinded studies performed at Sequenom involving459 new, high prevalence clinical samples collected prospectively, which brings the

22 total number of samples studied to 858. The data from the 459 new samples showthat Sequenom's proprietary technology for Down syndrome correctly identified all

23 eight first trimester Down syndrome samples (Le. sensitivity or detection rate) withno false positives and no false negatives, as confirmed by chorionic villus sampling

24 (CVS). Of the 15 second trimester confirmed Down syndrome samples, theSequenom RNA-based technology detected 14 samples, with one unresolved result

25 reflexed to the new DNA-based method. The DNA-based method accuratelydetected the Down syndrome. There was one false positive in the second trimester

26 samples, which would be reflexed for confirmatory genetic testing per AmericanCollege of Obstetricians and Gynecologists (ACOG) guidelines.

27"These results represent a significant advance in noninvasive prenatal screening,"

28 stated Allan T. Bombard, M.D., Chief Medical Officer of Sequenom. "In light of

- 15 - COMPLAINT

,

1 these outstanding results, the SEQureDx RNA-based Trisomy 21 technologyclearly represents a paradigm-shifting approach. I am encouraged by the single

2 false-positive result in this study representing one tenth of one percent of the totalsamples tested to-date, and the detection rate is notably superior to the current

3 standard of care, biochemical screening tests. As an ob-gyn, I am confident thesimplicity of the SEQureDx approach will be invaluable to physicians and the

4 patients they care for and will result in substantially fewer invasive procedures."

5 Breakthrough DNA Approach to Detection of Trisomy 21 and Other Aneuploidies

6 In addition, Dennis Lo, M.D. Ph.D., Li Ka Shing Professor of Medicine at TheChinese University of Hong Kong, presented insights in future opportunities for

7 noninvasive prenatal diagnostics, including pioneering work in a novel DNAapproach to the detection of fetal aneuploidy, an approach which Sequenom is

8 already evaluating in R&D studies.

9 Dr. Dragon from Sequenom presented early findings regarding this promisingtechnology from 359 samples. These findings showed that the DNA-based method

10 correctly identified all 68 unresolved results reflexed from the RNA method,including one confirmed positive Trisomy 21 sample. In addition, this method

11 correctly identified four confirmed positive Trisomy 13 samples and fourconfirmed positive Trisomy 18 samples.

12"We believe this technology represents a breakthrough approach for detecting

13 chromosomal aneuploidies," stated Dr. Dragon. "This method provides a universalmethod for detecting all chromosomal aneuploidies. The simple integration into

14 RNA lab workflow of this MassARRAY-based technology does not impact timelinesor costs. We will continue to evaluate this technology in parallel to the RNA

15 method and plan to incorporate the DNA-based method into our launch plans."

16 Future Applications in Detection of Monogenic Diseases

17 During his presentation, Dr. Lo focused on the future potential for Sequenom'stechnology to address the unmet needs in detection of monogenic diseases.

18 Currently, monogenic diseases, such as cystic fibrosis, B-thalassemia and sickle cellanemia, can only be definitively diagnosed prenatally through invasive procedures

19 following extensive carrier screening testing on both parents. In the United States,cystic fibrosis screening is recommended for all women of child bearing age (more

20 than 10 million individuals in the U.S. are carriers of the CF mutated gene, includingone in every 29 Caucasian Americans) and in certain regions of the world, B-

21 thalassemia affects anywhere from three to 16 percent of the population.

22 Data presented by Dr. Lo demonstrate that when individual mutant or normal DNAsequences are counted in maternal plasma using digital PCR technology, the number

23 of mutant genes inherited by an unborn fetus, and hence its disease status, can bedetermined. He further demonstrated that a 'molecular counting' strategy can be

24 made more efficient by taking into account the length of the DNA molecules inmaternal plasma, as fetal DNA molecules are known to typically be shorter than the

25 maternally derived molecules in maternal plasma. This digital counting approachenables the noninvasive diagnosis of B-thalassemia and hemoglobin E disease from

26 maternal plasma—forms of inherited anemias that affect millions of peopleworldwide. This molecular counting strategy can, in principle, be applicable to all

27 forms of monogenic diseases, namely paternally or maternally inherited, autosomaldominant diseases and autosomal recessive diseases with any combination of

28 parental mutations. Thus, the complete diagnosis of monogenic diseases can be

- 16- COMPLAINT

•

1 achieved noninvasively. Sequenom holds exclusive rights to this breakthroughtechnology representing a new approach that could potentially eliminate the need for

2 paternal testing and significantly reduce the use of invasive tests.

3 "This new diagnostic approach addresses a problem that has been puzzlinginvestigators in the field of noninvasive prenatal diagnostics over the last 10 years,"

4 stated Dr. Lo, study co-author. "Digital PCR technologies have enabled us tomeasure the minute imbalance of mutant and normal DNA sequences in maternal

5 plasma. This has freed us from the past restriction for monogenic disease analysiswhere we could only look at the paternally-inherited mutations noninvasively. This

6 research represents a significant paradigm shift in the way we approach plasmaDNA-based diagnostics, and offers substantial promise for bringing noninvasive

7 prenatal diagnosis of monogenic diseases closer to reality."

8 "Sequenom is committed to developing the next generation of prenatal diagnostictools that will provide physicians with the capabilities they need to noninvasively

9 diagnose genetic disorders early in a woman's pregnancy," commented Dr. Stylli."We believe these unique, noninvasive digital technologies have the potential to

10 dramatically impact the prenatal diagnostic market and we look forward to advancingthese innovative approaches as part of our long-term strategy to expand our prenatal

11 diagnostics franchise."

12 Sequenom's analyst briefing included the following speakers and topics:

13 Sequenom Business Overview and Update, Harry Stylli, Ph.D., President and ChiefExecutive Officer

14Trisomy 21 R&D Study Results, Elizabeth Dragon, Ph.D., Senior Vice President of

15 Research and Development

16 Glimpse into the Future of Aneuploidy Screening, Elizabeth Dragon, Ph.D., SeniorVice President of Research and Development

17Impact on Clinical Practice, Allan T. Bombard, M.D., Chief Medical Officer

18Understanding the Regulatory Landscape, Gary Riordan, Vice President, Regulatory

19 Affairs and Quality

20 Future Applications in Noninvasive Prenatal Diagnostics, Dennis Lo, M.D. Ph.D.,Professor of Medicine at The Chinese University of Hong Kong

21Data Continue to Support Significant Market Potential for Sequenom Prenatal

22 Franchise; Down Syndrome Test on Track for Launch in June 2009

23 [Emphasis added.]

24 34. On February 11, 2009, the Company issued a release entitled "Sequenom Reports

25 Fourth Quarter Financial Results Introduces 2009 Revenue Guidance," which stated in relevant part

26 that:

27 Sequenom, Inc. today reported financial results for the three and 12 months endedDecember 31, 2008.

28

- 17 - COMPLAINT

1 "This past year was pivotal for Sequenom as we continued to advance our geneticanalysis and molecular diagnostics businesses," stated Harty Stylli, Ph.D.,

2 President and Chief Executive Officer of Sequenom. "We accomplished many keymilestones over the last 12 months and are well-positioned for the launch of our

3 SEQUreDxTM Down syndrome technology in June. The data reported from ourR&D study containing 858-patient samples clearly shows that our SEQureDx

4 screening technology is considerably more accurate than the current standard-of-care screening technology, and even compares favorably against current invasive

5 procedures. We intend to review in extensive detail the specifics of our promisingstudy results and commercialization milestones by dedicating substantial time to

6 these during our quarterly investment-community conference call later today."

7 Sequenom reported total revenues for the fourth quarter of 2008 of $12.2 million, anincrease of 9% compared with total revenues of $11.1 million for the fourth quarter

8 of 2007. The net loss for the fourth quarter of 2008 was $15.4 million, or $0.25 pershare, compared with the net loss for the fourth quarter of 2007 of $7.9 million, or

9 $0.18 per share.

10 * * * *

11 Full Year 2008 Financial Results

12 Total revenues for 2008 were $47.1 million, an increase of 15%, compared with totalrevenues of $41.0 million for 2007. Sequenom reported a net loss for 2008 of $44.2

13 million, or $0.83 per share, compared with a net loss for 2007 of $22.0 million, or$0.57 per share.

14* * * *

15As of December 31, 2008, Sequenom had cash, cash equivalents, restricted cash

16 and marketable securities of $99.7 million, compared with $52.2 million as ofDecember 31, 2007.

17"Among our many activities, we are in the process of transferring our RNA-based

18 SEQureDx technology to our CLIA laboratory and expect to have a fullyoperational laboratory by early March," said Dr. Stylli. "We have made substantial

19 investments in our IT infrastructure to enhance the capabilities of the laboratory totrack samples and provide electronic ordering and reporting, and have put in place

20 sample collection and transportation systems that can be readily scaled. We are alsobuilding relationships with payers that will support our pricing structure and

21 reimbursement opportunities."

22 2009 Financial Guidance

23 Guidance for 2009 is limited to the Genetic Analysis tools business and corporateadministration. Financial guidance for the Molecular Diagnostics business will be

24 provided at a later date:

25 Revenue for the Genetic Analysis business is expected to be flat in the first half of2009 compared to the first half of 2008, and is projected to grow approximately 15%

26 in the second half of the year. Revenues are expected to range between $49 million to$53 million for 2009.

27Gross margins are expected to be up slightly to approximately 60% in 2009 due to

28 higher consumables sales and higher margins in the Genetic Services business.

- 18 - COMPLAINT

• •

1 Operating expenses for the Genetic Analysis business are expected to beapproximately $29 million for 2009. Based on this, the Genetic Analysis business is

2 expected to be slightly cash flow positive in 2009.

3 Corporate G&A expenses in 2009 will be approximately $16 million, reflectingadditional administrative costs due to the launch of our Molecular Diagnostics

4 business and increased legal costs.

5 We expect stock-based compensation to be between $6 million and $8 million for2009.

6In summary, we expect our Genetic Analysis revenues to be approximately $49

7 million to $53 million and our total operating expenses, excluding MolecularDiagnostics, to be approximately $53 million.

8Early 2009 Highlights

9Announced Additional Positive Results from RNA Down Syndrome Screening

10 Study and Unveiled Breakthrough DNA Approach to Prenatal Diagnostics: Earlierthis year, Sequenom announced positive data regarding the performance of its

11 Down syndrome test, including data from 459 new, high-prevalence patientsamples, bringing the total number of patient samples studied 1o858. Based on the

12 results from total study samples, including samples obtained as early as eightweeks of pregnancy, Sequenom's SEQureDx RNA-based technology demonstrated

13 a 96.6% positive predictive value (PP9 and a 100% negative predictive value(NP9. Sequenom also unveiled a breakthrough DNA-based SEQureDx

14 technology demonstrating, in early studies, universal ethnic coverage, highsensitivity and specificity, and the ability to detect Trisomy 21 (Down syndrome),

15 Trisomy 18 (Edwards syndrome) and Trisomy 13 (Patau syndrome) in a single test

16 * * * *

17 Fourth Quarter 2008 Highlights

18 New Data Indicates Next-generation Noninvasive Technology AccuratelyQuantifies Maternal Plasma DNA Sequences for Down syndrome: In December

19 Sequenom announced new data from a collaborative project with The ChineseUniversity of Hong Kong, published in the Early Edition of the Proceedings of the

20 National Academy of Sciences, that demonstrate Sequenom's innovative, next-generation noninvasive prenatal diagnostic technology accurately quantified

21 maternal plasma DNA sequences for Down syndrome, based on samples takenfrom women in the first and second trimesters of pregnancy. These data are the

22 first to suggest that this future approach, based on massively parallel genomicDNA sequencing, can be effective in women who had not previously undergone

23 invasive procedures.

24 Noninvasive Prenatal Diagnostic Technology Allows Diagnosis of MonogenicDiseases: In November Sequenom announced that breakthrough data from a

25 collaborative project with The Chinese University of Hong Kong supporting thenoninvasive prenatal diagnosis of monogenic diseases were published online in the

26 Early Edition of the Proceedings of the NationalAcademy of Sciences. Monogenicdiseases, which include cystic fibrosis, fl-thalassemia and sickle cell anemia, are

27 currently definitively diagnosed prenatally only through invasive proceduresfollowing extensive carrier screening testing on both parents.

28

-19- COMPLAINT

••

1 * * * *

2 Near-term Milestones

3 Launch SEQureDx RNA Down syndrome screening test Sequenom's noninvasiveRNA-based prenatal test to detect Down syndrome as an LTD test is expected to be

4 launched in June 2009.

5 Launch SEQureDx DNA-integrated Trisomy test Based on breakthroughtechnology, this new DNA-based approach for detecting Down syndrome (TrLsomy

6 21), and Trisomy 18 and Trisomy 13 in a single test, with universal ethniccoverage, and high sensitivity and specificity has the potential for launch as early

7 as June 2009, along with the RNA-based approach.

8 Launch Additional SEQureDx-based tests. Sequenom expects to launchnoninvasive prenatal screening tests as LDTs for RHD and Cystic Fibrosis on the

9 MassARRAY® platform in the second quarter of 2009, and its Fetabcy screeningtest for gender-linked disorders in the third quarter of 2009.

10Publication of data from the 858-patient sample Down syndrome R&D study. Data

11 from this study, conducted both prospectively and retrospectively in both normaland high-risk patients, is expected to be published in the third quarter of 2009.

12 This study supported assay optimization for the Down syndrome screening testusing SEQureDx Technology.

13Publication in peer-reviewed journals of results of the RNA-based Noninvasive

14 Aneuploidy (RNA) Study. This is an independent, prospective, multi-arm, multi-center observational study to document the performance of the SEQureDx

15 technology for Down syndrome through the evaluation of samples from up to10,000 pregnant women in high-prevalence pregnancies. Publication of second

16 trimester data is expected in the fourth quarter of 2009. Publication of firsttrimester data is expected in the second quarter of 2010.

17Presentation of results from Noninvasive Screening for Fetal Aneupkidy: A New

18 Maternal Plasma Marker, an LDT validation study, at the 2010 Society for Fetaland Maternal Medicine (SMFM) meeting. This study, initiated by SCMM Ls

19 intended to evaluate samples from 3,000 to 5,000 pregnant women for Downsyndrome as part of the SEQureDx Technology Trisomy 21 test validation prior to

20 the planned commercial introduction of the test in June 2009. Publication of thestudy data in a peer-reviewed journal is expected in the second quarter of 2010.

21[Emphasis added.]

2235. On March 3, 2009, the Company issued a release entitled "Sequenom Selects PDI to

23Provide Sales Team for Launch of Noninvasive Prenatal Screening Tests," which stated in relevant

24part that:

25PDI, Inc. and Sequenom Center for Molecular Medicine, LLC (SCMM), a wholly

26 owned subsidiary of Sequenom, Inc. announced today that PDI has been selected toprovide the sales infrastructure to launch and commercialize SCMM's noninvasive

27 prenatal genetic screening tests based on its SEQureDx(TM) technology.

28

- 20 - COMPLAINT

•1 Under the direction of SCMM management, PDI will support the commercialization

of SCMM's fetal Rhesus D genotyping test from a maternal blood sample. This test2 will reduce the risk to the mother and fetus by providing clinicians early and

accurate information. Under the agreement, PDI will also provide sales support to3 SCMM upon commercialization of its noninvasive Down syndrome (Trisomy 21)

test which is expected to be launched in June of this year, as well as other4 laboratory developed tests.

5 Under terms of the agreement, PDI in conjunction with the SCMM managementteam will hire, train and develop a sales team for the Sequenom Center for Molecular

6 Medicine. An initial wave of business development managers are targeted for thefirst quarter 01 2009, with additional expansion scheduled throughout the second

7 to fourth quarters of 2009. Sales call points will be focused on our obstetrician andperinatal specialist partners. Financial terms of the engagement were not disclosed.

8"We are delighted to have been selected by Sequenom to help commercialize a

9 highly visible and major scientific breakthrough technology in the field ofwomen's health," said Nancy Lurker, Chief Executive Officer of PDI. "This is

10 precisely the kind of engagement PDI is seeking with our specialty clients. We areeager to begin our work with Sequenom and gain widespread support and use for this

11 technology."

12 Harry Stylli, Ph.D., President and Chief Executive Officer of Sequenom, said, "ThePDI team has shown a keen understanding of, and strong strategic insight into, the

13 marketplace. As we grow the market for SEQureDx tests, PDI' s flexible approachallows them to be responsive to our needs with minimal advance notice, so we can

14 most efficiently and effectively build our sales organization. We are looking forwardto working with PDI to make the SEQureDx-based tests 'must have' screens for

15 maternal-fetal health."

16 [Emphasis added.]

17 36. Defendants' statements set forth above were materially false and misleading because:

18 (i) the data being collected in Sequenom's SEQureDx Technology testing was compromised; (ii) the

19 SEQureDx Technology testing process was flawed and Defendants were failing to exercise the

20 requisite control over access to and accountability for the data being gathered; (iii) the SEQureDx

21 Technology being developed could not identify the extra copy of genetic material on the 21st

22 chromosome needed to predict Down syndrome with the level of accuracy being claimed; (iv)

23 Defendants lacked a reasonable basis upon which to promise a June 2009 product release; and (v)

24 because the SEQureDx Technology was not able to identify the extra copy of genetic material on the

25 21st chromosome needed to predict Down syndrome with the level of accuracy being provided and

26 because the Company's testing protocol was flawed and Sequenom's internal controls were

27 defective, Defendants' financial reports and projections which were heavily reliant upon a June 2009

28 launch of a product utilizing the SEQureDx Technology were materially false and misleading.

- 21 - COMPLAINT

•

1 THE TRUTH IS REVEALED

2 37. On April 29, 2009, after the close of trading, Sequenom issued a release disclosing

3 that it was delaying the launch of SEQureDx Technology because it suddenly discovered the actual

4 test data and results invalidated previous pronouncements about the effectiveness of its noninvasive

5 prenatal Down syndrome test. The Company's shares fell precipitously by 68% to $4.76 in after-

6 hours trading as the Company also reported its first-quarter net loss widened on higher expenses and

7 costs purportedly related to the planned launch of the SEQureDx Technology prenatal tests. These

8 results were worse than the market had been led to expect, and the Company also forecast a larger

9 2009 loss than the market had been led to expect.

10 38. Sequenom executives stated they would attempt to release a validated test

11 demonstrating the SEQureDx Technology's reliability in detecting Down syndrome by the 4Q 09,

12 after publication of the results from ongoing clinical studies. After having been led to believe by

13 Defendants throughout the Class Period that: (i) Sequenom's testing was being conducted in a

14 scientifically sound fashion; (ii) the SEQureDx Technology was scientifically and technically sound;

15 and (iii) that there would be a June 2009 product release, the market was incensed and questioned

16 why the Company needed an additional eight months to determine if SEQureDx Technology could

17 in fact identify the extra copy of genetic material on the 21st chromosome needed to predict Down

18 syndrome. Sequenom also disclosed that its Board of Directors had formed a special committee of

19 independent directors to oversee an investigation of its previously misstated test data and results.

20 39. Simultaneously, for its 1Q 09, Sequenom reported a net loss of $17.5 million, or 29

21 cents a share, compared with a year-earlier net loss of $8.6 million, or 19 cents a share. Revenue

22 dropped 18% to $8.7 million. Research and development expenses increased by 80% in the quarter.

23 Sequenom also disclosed it expects a FY 2009 loss of $62 million to $67 million and a cash burn of

24 $45 million to $52 million.

25 40. On April 30, 2009, the Wall Street Journal ran a story entitled "Sequenom Shrs

26 Plunge On Mishandled Down Syndrome Test Data," which stated in relevant part that:

27 The disclosure has produced more questions than answers and createduncertainty about whether the tests will ultimately be shown to work.

28

-22- COMPLAINT

n .

•1 Sequenom said the data was "mishandled" by individuals in the company,

which "raises significant concerns regarding the integrity of that data." On a2 conference call late Wednesday, it declined to comment on whether the

occurrences were fraudulent or at what level they occurred.3

It said four people in research and development have been suspended, an4 independent investigation launched, and it has informed both the Food and

Drug Administration and the Securities and Exchange Commission of the5 happenings.

6 "The clinical performance that was portrayed for these tests appears to bequestionable," said Harry Stylli, president and chief executive, on the call.

7That disclosure has Wall Street wondering why the company is continuing

8 large, expensive clinical trials of the SEQureDx tests if the preceding datamay not be valid. Data from those ongoing trials, expected in the fourth

9 quarter, are hoped to be the basis of a launch in the second half of 2010,company executives said Wednesday.

10"We do not understand why the company does not take a few hundred

11 samples or even a thousand samples and run them quickly.. .to determine ifthe test has potential to work," said Lazard Capital Markets analyst Sean

12 Lavin, who downgraded the shares to sell from buy.

13 "It would seem the company should be able to determine the test's viabilitymuch more quickly than over eight months," he added.

14Sequenom spokesman Ian Clements said the company is taking its time in

15 order to "dot all the Is and cross all the Ts" in determining that the test isvalid.

16The company believes that issues only occurred in data related to its Down

17 Syndrome test, Clements said, but it is reviewing data related to Rhesus D,cystic fibrosis and Fetal XY prenatal test that it still expects to launch later

18 this year.

19 The news has shakened Wall Street's trust in the company. Whilemanagement reaffirmed confidence in the technology, JMP Securities

20 analyst Charles Duncan said, "Sequenom's tenuous credibility hasevaporated" and restoring it "could prove to be a long and treacherous

21 road."

22 Several analysts Thursday downgraded the stock and reduced their pricetargets. For example, Barclays Capital removed any value for SQNM's

23 diagnostics businesses and values its genetic analysis — which the firm seesbreaking even this. year and growing over time — at $4.

24[Emphasis added.]

2541. As a result of these disclosures, Sequenom's stock ratings were slashed and the price

26of Sequenom common stock plunged on the morning of April 30, 2009 when trading opened from its

27close of $11.43 on April 29, 2009 to an intraday low of $3.48 on over 85 million shares trading, or

28

-23 - COMPLAINT

• •

1 27 times its average daily volume over the past 30 days. Over 77% of Sequenom's market

2 capitalization simply vanished as artificial inflation came out of the price.

3 LOSS CAUSATION/ECONOMIC LOSS

4 42. By misrepresenting Sequenom's clinical data and sales practices, the Defendants

5 presented a misleading picture of Sequenom's prospects. Specifically, during the Class Period,

6 Defendants misinformed the investing public that: (i) the data being collected in Sequenom's

7 SEQureDx Technology testing was reliable; (ii) the SEQureDx Technology testing process was

8 effective and Defendants were exercising the requisite control over access to and accountability for

9 the data being gathered; (iii) the SEQureDx Technology being developed could identify the extra

10 copy of genetic material on the 21st chromosome needed to predict Down syndrome with the level

11 of accuracy being claimed; (iv) Defendants' promise of a June 2009 product release was based on

12 reliable data; and (v) Defendants' Class Period financial reports and projections which were heavily

13 reliant upon a June 2009 launch of a product utilizing the SEQureDx Technology were accurate. In

14 so doing, Defendants misrepresented Sequenom's financial results, outlook and its actual business

15 prospects going forward, and artificially inflated the Company's stock price, permitting it to conduct

16 the $92 million Offering, acquire a diagnostic company for fewer shares of Sequenom stock than

17 would have been necessary absent the inflation and commence a stock-based tender offer for another

18 company.

19 43. Defendants' misrepresentations caused and maintained the artificial inflation in the

20 price of Sequenom common stock throughout the Class Period and until the truth was revealed to the

21 market.

22 44. Defendants' false and misleading statements had the intended effect and caused

23 Sequenom's common stock to trade at artificially inflated levels throughout the Class Period, trading

24 over $27.76 per share on September 24, 2008.

25 45. As a direct result of public revelations regarding the truth about Down syndrome test

26 under development, Sequenom's common stock fell from its close of $11.43 on April 29, 2009 to an

27 intraday low of $3.48 on over 85 million shares trading, or 27 times its average daily volume over

28

- 24 - COMPLAINT

.•

• • 1111,1 the past 30 days. This drop removed the inflation from Sequenom's stock price, causing real

2 economic loss to investors who had purchased Sequenom common stock during the Class Period.

3 APPLICABILITY OF PRESUMPTION OF RELIANCEFRAUD ON THE MARKET DOCTRINE

4

46. At all relevant times, the market for Sequenom was an efficient market for the5

following reasons, among others:6

(a) Sequenom met the requirements for listing, and was listed and actively traded78 on the Nasdaq, a highly efficient and automated market;

(b) as a regulated issuer, Sequenom filed periodic public reports with the SEC and9

the Nasdaq;10

11(c) Sequenom regularly communicated with public investors via established

12 market communication mechanisms, including regular disseminations of press releases on the

13 national circuits of major newswire services and other wide-ranging public disclosures, such as

14 communications with the financial press and other similar reporting services; and

15(d) Sequenom was followed by several securities analysts employed by major

16 brokerage firms who wrote reports that were distributed to the sales force and certain customers of

17 their respective brokerage firms. Each of these reports was publicly available and entered the

18 public marketplace.

19 47. As a result of the foregoing, the market for Sequenom promptly digested current

20 information regarding Sequenom from all publicly available sources and reflected such information

21 in the stock prices. Under these circumstances, all purchasers of Sequenom during the Class Period

22 suffered similar injury through their purchase of Sequenom at artificially inflated prices and a

23 presumption of reliance applies.

24 NO SAFE HARBOR

25 48. The statutory safe harbor provided for forward-looking statements under certain

26 circumstances does not apply to any of the allegedly false statements pleaded in this Complaint.

27 Many of the specific statements pleaded herein were not identified as "forward-looking statements"

28 when made. To the extent there were any forward-looking statements, there were no meaningful

-25 - COMPLAINT

1 cautionary statements identifying important factors that could cause actual results to differ materially

2 from those in the purportedly forward-looking statements. Alternatively, to the extent that the

3 statutory safe harbor does apply to any forward-looking statements pleaded herein, Defendants are

4 liable for those false forward-looking statements because at the time each of those forward-looking

5 statements were made, the particular speaker knew that the particular forward-looking statement was

6 false, and/or the forward-looking statement was authorized and/or approved by an executive officer

7 of Sequenom who knew that those statements were false when made.

8 CLASS ACTION ALLEGATIONS

9 49. Plaintiff brings this action as a class action pursuant to Federal Rule of Civil

10 Procedure 23(a) and (b)(3) on behalf of a class consisting of all persons or entities who acquired

11 Sequenom common stock during the Class Period (the "Class"). Excluded from the Class are

12 Defendants, the officers and directors of the Company, at all relevant times, members of their

13 immediate families and their legal representatives, heirs, successors or assigns and any entity in

14 which Defendants have or had a controlling interest.

15 50. The members of the Class are so numerous that joinder of all members is

16 impracticable. Throughout the Class Period, Sequenom's common stock was actively traded on the

17 Nasdaq. While the exact number of Class members is unknown to Plaintiff at this time and can only

18 be ascertained through appropriate discovery, Plaintiff believes that there are hundreds or thousands

19 of members in the proposed Class. Record owners and other members of the Class may be identified

20 from records maintained by Sequenom or its transfer agent and may be notified of the pendency of

21 this action by mail, using the form of notice similar to that customarily used in securities class

22 actions.

23 51. Plaintiff s claims are typical of the claims of the members of the Class as all members

24 of the Class are similarly affected by Defendants' wrongful conduct in violation of federal law that is

25 complained of herein.

26 52. Plaintiff will fairly and adequately protect the interests of the members of the Class

27 and has retained counsel competent and experienced in class and securities litigation.

28

- 26 - COMPLAINT

r

S

1 53. Common questions of law and fact exist as to all members of the Class and

2 predominate over any questions solely affecting individual members of the Class. Among the

3 questions of law and fact common to the Class are:

4 (a) whether the Exchange Act was violated by Defendants as alleged herein;

5 (b) whether statements made by Defendants misrepresented material facts

6 about the business, operations and management of Sequenom; and

7 (c) to what extent the members of the Class have sustained damages and the

8 proper measure of damages.

9 54. A class action is superior to all other available methods for the fair and efficient

10 adjudication of this controversy since joinder of all members is impracticable. Furthermore, as the

11 damages suffered by individual Class members may be relatively small, the expense and burden of

12 individual litigation make it impossible for members of the Class to individually redress the wrongs

13 done to them. There will be no difficulty in the management of this action as a class action.

14 COUNT IFor Violation of §10(b) of the Exchange Act and Rule 10b-5

15 Against the Company and the Individual Defendants

16 55. Plaintiff repeats and realleges each and every allegation contained above as if fully set

17 forth herein.

18 56. During the Class Period, the Company and the Individual Defendants disseminated or

19 approved the false statements with deliberate disregard as to their accuracy, or which they knew

20 were misleading in that they contained misrepresentations and failed to disclose material facts

21 necessary in order to make the statements made, in light of the circumstances under which they were

22 made, not misleading.

23 57. These Defendants violated §10(b) of the Exchange Act and Rule 10b-5 in that they:

24 (a) employed devices, schemes and artifices to defraud;

25 (b) made untrue statements of material facts or omitted to state material facts

26 necessary in order to make the statements made, in light of the circumstances under which they

27 were made, not misleading; or

28

- 27 - COM PLAINT

,1110

1 (c) engaged in acts, practices and a course of business that operated as a fraud or

2 deceit upon Plaintiff and others similarly situated in connection with their purchases of Sequenom

3 during the Class Period.

4 58. Plaintiff and the Class have suffered damages in that, in reliance on the integrity of

5 the market, they paid artificially inflated prices for Sequenom. Plaintiff and the Class would not

6 have purchased Sequenom at the prices they paid, or at all, if they had been aware that the market

7 prices had been artificially and falsely inflated by Defendants' misleading statements.

8 COUNT IIFor Violation of §20(a) of the Exchange Act

9 Against the Company and the IndividualDefendants

1059.

11

Plaintiff repeats and realleges each and every allegation contained above as if fully set

forth herein.12

1360. The Company and the Individual Defendants acted as controlling persons of

14 Sequenom within the meaning of §20(a) of the Exchange Act. By reason of their positions with the

15 Company, and their ownership of Sequenom, the Company and the Individual Defendants had the

16 power and authority to cause Sequenom to engage in the wrongful conduct complained of herein.

17 Sequenom controlled the Company, the Individual Defendants and all of its employees. By reason

18 of such conduct, Defendants are liable pursuant to §20(a) of the Exchange Act.

PRAYER FOR RELIEF19

20WHEREFORE, Plaintiff prays for relief and judgment, as follows:

21A. Determining that this action is a proper class action and certifying Plaintiff as a

Class representative under Rule 23 of the Federal Rules of Civil Procedure;22

23B. Awarding compensatory damages in favor of Plaintiff and the other Class members

24 against all Defendants, jointly and severally, for all damages sustained as a result of Defendants'

25 wrongdoing, in an amount to be proven at trial, including interest thereon;

26C. Awarding Plaintiff and the Class their reasonable costs and expenses incurred in

27 this action, including counsel fees and expert fees;

28D. Awarding rescission or a rescissory measure of damages; and

•- 28 - COMPLAINT

, • ••

1

2 E. Awarding such equitable/injunctive or other relief as deemed appropriate by the

3 Court.

4 JURY DEMAND

5 Plaintiff demands a trial by jury.

6 DATED: May 11, 2009 SCOTT + T LARTHIP L. S

7 MARY . BL • '#40'

8',lap/. 44,Agaitairioaa

9ARTHUV" . SHINGLER III

10600 B Street, Suite 1500

11 San Diego, CA 92101Telephone: 619/233-4565

12 619/233-0508 (fax)

13 SCOTT + SCOTT, LLPDAVID R. SCOTT

14 108 Norwich AvenueChester, CT 06415

15 Telephone: 860/537-3818860/537-4432 (fax)

16Counsel for Plaintiff

17

18

19

20

21

22

23

24

25

26

27

28

- 1 - COMPLAINT

• ••PLAINTIFF CERTIFICATION

PURSUANT TO FEDERAL SECURITIES LAWS

A6tu,k, , ("Plaintiff'), declares, as to the claims asserted under the federalsecurities laws, that:

1. Plaintiff has reviewed the Complaint and retains Scott + Scott, LLP and such co-counsel it deemsappropriate to associate with to pursue such action on a contingent fee basis.

2. Plaintiff did not purchase the security that is the subject of this action at the direction ofPlaintiff's counsel, or in order to participate in any private action.

3. Plaintiff is willing to serve as a representative party on behalf of the class, including providingtestimony at deposition and trial, if necessary.

4. Plaintiffs transaction(s) in the SEQUENOM, INC. (SQNM) security that is the subject of thisaction during the Class Period is/are as follows:

No of Shares Buy/Sell Date Price Per Share

.5-0 0 S ? I t I c5e c, 0

* Please attach additional sheets if necessary5. During the three years prior to the date of this Certification, Plaintiff has never served, norsought to serve, as a class representative in a federal securities fraud case.

6. Plaintiff will not accept any payment for serving as a representative party on behalf of the classbeyond the Plaintiff's pro rata share of any recovery, except such reasonable costs and cxpenses(including lost wages) directly relating to the representation of the class as ordered or approved by theCourt.

I declare under penalty of perjury under the laws of the United States of America that the foregoing istrue and correct. Executed this 6- day of IV\ k I , 2009, at .5"-r- (city, state).

Your Printed Name: A K. 0)) 111 6 e

Signature:

Mailing Address:

REDACTEDTelephone number:

E-mail address:

•4a1A.IA y %.A./14.1 it wutsuala 1 461; 1

rtzl AMPRITHADE-Shortcuts Get Quotes SyTi.11)1 locs/IIII: Search Account

Apex Select-. +"/BMA (571 Me-irqin trAding .n • -

• -'

H06:fly:I I Portfolio & Accounts LTra:11: Nosearch Trgclinc.) Tcois Pi4oirling 5. i70,•tiroryn orit Clit,ni

g Potoi W !fliito'ry

Wed 5t:p n 0'2t)o1 1-11)T r.zirjo 11,,?11:

History & StatementsREDAcTED

DIVISION OF TD AMERITRADE INCAIVIERITRADE

PO BOX 2209 S I ,CA pex OMAHA, NE 68103-2209

Confirmation Notice

AARON MAGEL TRMAGEL FMLY TR ADTD 1/2/90

Account Other Transaction Capacity Your

- Number Information Number Codes Repnieentative04186663958 FF

CUSIP Principal Sales

Activity Quantity Price FeesNumber Amount FeeYOU BOUGHT 500 817337405 21.00 10,500.00

As of Trade Settlement Netinterest CommissionTrade Date Date Date Amount09/0912008 09/12/2008 9.95. 10,509.95

Symbol Trade DescriptionSEQUENOM INC

SCINM COM

THIS IS AN UNSOLICITED TRADESubject to the following T .i.10 .1)4 crAylitivoril

...,...... ... . . .1-1.c.11.rtinp.corp.

'`.:\[+.!.Tok.!!P Pt1-,N li w. tv.:n. l :s I ivZs-,,:y I :tt•ry (:.rc. 1 'opir; fOgrf)pt-11401:1

.II.IT 2d ne is iisait(: 'L. nit)t l i t .old . 1 1 P. M iRi TR AI) :, oi• Al,..01.(11v,r)L, tilni n Thtlr r1r.sy:v./.:),/;..(. Tr)

;rodornarl ..joinl.i y Lty AME:P.1 f4/'.017 ; i ; ' cnpy, .:n ,),1 t'cic loconto tt 11) •.;:cn.o.),,v, Inc. 1% ;) riyht!

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fi rn: oLomlt,,le 1 . 11;)1: dara; 17f1) ,..! C.;) nitt nr.IV btt II:41)!* 11:! (1:11: (*her In 1.111iir t-wyon,71 cStrtt.rot.

i R i ... C F:iPT ANC) tisE (.)F 71 . 11! :.; St2Rv;r.:t: SL)I3.!EC: I . 1H:. 1 1 r ;tFAS AO!) CC.)NDI I r.7.itik Af.3RV.E,?.n15N'.i \NEI!! IT)

•

r0

0)- . . •tt a.IS 44 (Rev. 12/07) CIVIL COVER SHEET .The IS 44 civil cover sheet and the information contained herein neither replace nor supplement the filing and service ofpleadings or otperliTeT as rEare law, except as providedby local rules of court. This form, approved by the Judicial Conference of the United States in September 1974, is required for the use ath CI rk o u the purpose of initiatingthe civil docket sheet. (SEE INSTRUCTIONS ON THE REVERSE OF THE FORM.) I' .....1. (a) PLAINTIFFS DEFENDANTS

09 MAY -1 1 PM 2 : 03

-r CLK UER. ,S. DISTRICT COURT(b) County of Residence of First Listed Plaintiff 5 A il/A 747 County of Residence of Firstliaitinidiefidaiir N.1 . [0 C Al Inlitil'A

(EXCEPT IN U.S. PLAINTIFF CASES) , (IN U.S. PLAINTIFF CASES ONLY)NOTE: IN LAND CONDEMNATION CASES, USE THE 10 OF THE

LAND INVOPMED. . ' DEPUTY

/(C) Attorney's (Firm Name, Address, and Telephone Number) Attorneys (If Known)

•Arthur L. Shingler III, Scott + Scott LLP, 600 B Street, #1500, San '09 CV 1 01 ?! L , R B BDiego, CA 92101, 619/233-4565 im

II. BASIS OF JURISDICTION (Place an "X" in One Box Only) 111. CITIZENSHIP OF PRINCIPAL PARTIES( .. . ,Place an "X" in Onc Box tor Plaintiff, (For Diversity CliSCH Only) and One Box for Defendant)

O 1 U.S. Government X 3 Federal Question _----. PTF DEF PTF DEFPlaintiff (U.S. Government Not.'a Party) Citizen of This State 0 1 0 I Incorporated or Principal Place 0 4 0 4' ,.., of Business In This State

0 2 U.S. Government 0 4 Diversity Citizen of Another State 0 2 0 2 Incorporated andPrincipal Place 0 5 0 5Defendantof Business In Another State(Indicate Citizenship of Parties in Item 111)

Citizcn or Subject of a 0 3 0 3 Foreign Nation 0 6 0 6Foreign Country

1 . ATURE OF SUIT Place an "X" in Onc Box OnllillitingEDTMEIlifiliffilifflilifiii 701,11REMIIIMENEMBIIMMaillilEMENIMMIIIMILINIIMiillifill$211111O 110 Insurance PERSONAL INJURY PERSONAL INJURY 0 610 Agriculture 0 422 Appeal 28 USC 158 0 400 State ReapportionmentO 120 Marine 0 310 Airplane 0 362 Pcrsonttl Itliury - 0 620 Other Food & Drug 0 423 Withdrawal 0 410 AntitrustO 130 Miller Act 0 315 Airplane Product Mcd. Malpractice 0 625 Drug Related Seizure 28 USC 157 0 430 Banlcs and BankingO 140 Negotiable Instrument Liability 0 365 Personal Injury - of Property 21 USC 881 0 450 Commerce

....3 150 Recovery of Overpayment 0 320 Assault, Libel & Product Liability ' 0 630 Liquor Laws E:::::::PROPERTY:RIGIMV::::::::::*: 0 460 Dcponation& Enforcement ofJudgment Slander 0 368 Asbestos Personal 0 640 R.R. & Truck 0 820 Copyrights 0 470 Racketeer Influenced and

cif< 151 Medicare Act 0 330 Federal Employers' Injury Product 0 650 Airline Rcgs. 0 830 Patent Corrupt Organizations152 Recovery of Defaulted Liability Liability 0 660 Occupational 0 840 Trademark 0 480 Consumer Credit

Student Loans 0 340 Marine PERSONAL PROPERTY Safety/Health 0 490 Cable/Sat TV(Excl. Veterans) 0 345 Marine Product 0 370 Other Fraud 0 690 Other 0 810 Selective Service

.0E, 153 Recovery Of Overpayment Liability 0 371 Truth in Lending ,:::,:::::::::::::::::,:,,:,:::::::Viirlficintillifft°,.:::::;:::,::::,:::: liii 850 Securities/Commodities/•

coof Veteran's-Benefits 0 350 Motor Vehicle 0 380 Other Personal 0 710 Fair Labor Standards 0 861 HIA (13951)') Exchange160 Siockholdcrs Suits 0 355 Motor Vehicle Properly Damage Act 0 862 Black Lung (923) 0 875 Customer:Challenge

....No@ 190 Other Contract Product Liability 0 385 Property Damage 0 720 Labor/Mgmt. Relations 0 863 DIWC/DIWW (405(g)) 12 USC 3410

imMCd

195 Contract Prodiict Liability 0 360 Other Personal Product Liability 0 730 Labor/Mgmt.Reporting 0 864 SS11) Title XVI 0 890 Other Statutory Actions196 Franchise In'ur & Disclosure Act 0 865 RSI 405 0 891 Agricultural ActsERIMIEMMINEMINMEMIWargin•Z=finlain7-::::: 0 740 Railway Labor Act ::::::::::IfE :::::::::::: 0 892 Economic Stabilization Act

210 Land Condemnation 0 441 Voting 0 510 Motions to Vacate 0 790 Other Labor Litigation 0 870 Taxes (U.S. Plaintiff 0 893 Environmental Matters0 220 Foreclosure 0 442 Employment Sentence 0 791 Empl. Rat. Inc. or Defendant) 0 894 Energy Allocation Act0 230 Rem Lactic & Ejectment 0 443 Housing/ Habeas Corpus: Security Act 0 871 IRS—Third Party 0 895 Freedom of Information0 240 TOft8 to Land Accommodations 0 530 General 26 USC 7609 Act0 245 Tort Product Liability 0 444 Welfare 0 535 Death Penalty :::!:ii]::i::::::::INIMIGRAltlfOgiii::::::::::::i: 0 900Appeal of Fee Determination0 290 All Other Real Propcny 0 445 Amer. w/Disabilities - 0 540 Mandamus & Other LI 462 Naturalization Application Under Equal Access

• Employment 0 550 Civil Rights 0 463 Habeas Corpus - to JusticeO 446 Amcr. w/Disabilitics - 0 555 Prison Condition Alien Detainee 0 950 Constitutionality of

• Other 0 465 Other Immigration State StatutesO 440 Other Civil Rights Actions

V. ORIGIN (Place an "X" in One Box Only) Appeal to DistricttR 1 Original 10 2 Removed from 0 3 Remanded from 0 4 Reinstated or 0 c Transferred from 0 6 Multidistrict 07 .11. tiF from' another d MagistrateProceeding State Court Appellate Court Reopened istrict Litigation(specify) Judiunent

Cthe U.S.b.C.givil Statute =der which you are filing (Do not elle Jurisdictional statutes unless diversity):lb u section 'dim)

VI. CAUSE OF ACTION Brief description of cause:Alleged violations ot the Exchange Act ot 1934 caused plaintitt to purchase stock at intlated prices

VII. REQUESTED IN 0 CHECK IF THIS IS A CLASS ACTION DEMAND $ CHECK YES only if demanded in complaint:COMPLAINT: UNDER F.R.C.P. 23 JURY DEMAND: li4 Yes 0 No

Vill. RELATED CASE(S) (Scc instrocant17 41—. i—htf—c14...A S cAA.412.40.1.14— 1E5IF ANY JUDGE DOCKET NUMBER

DATE SIGNATURE OF ATTOR • A A

3- 4 ( - 01 *41 ..

FOR OFFICE USE ONLY

,.-- 5R S/II/oRECEIPT t/CC6b5C) AMOUNT 4.-i-"y...1 APPLYING IFP JUDGE MAO. JUDGE—

0

•

SCHEDULE B(RELATED CASES)

DOCKET NO. JUDGE

3:2009cv00951 Hon. Jeffrey T. Miller

3:2009cv00990 Hon. John A. Houston

3:2009cv00921 Hon. Larry A. Burns

3:2009cv00949 Hon. William Q. Hayes

3:2009cv00955 Hon. Marilyn L. Huff

3:2009cv00973 Hon. William Q. Hayes

3:2009cv00976 Hon. Roger T. Benitez

3:2009cv00984 Hon. Barry T. Moskowitz

3:2009cv01000 Hon. Jeffrey T. Miller

3:2009cv00922 Hon. William Q. Hayes

111, 1110

Court Name: USDC California Southern

Division: 3

Recei pt Number: CAS000650

Cashier ID: bhartman

Transaction Date: 05/11/2009

Payer Name: SCOTT AND SCOTT

CIVIL FILING FEE

For: SCOTT AND SCOTT

Case/Party : D-CAS-3-09-CV-001013-001

Amount: $350.00

CREDIT CARD

• Amt Tendered: $350.00

Total Due: $350.00

Total Tendered: $350.00

Change Amt: $0.00

1

There will be a fee of $45.00

charged for any returned check.

„ .