Dist. Ct. did not err in dismissing with prejudice plaintiffs’ action alleging violation of section 10(b) of Securities Exchange Act arising out of: (1) defendant’s initial statements indicating that initial test results regarding its newly designed 787-8 Dreamliner passenger airplane were “positive” even though at time of statement wings of said airplane had failed certain tests; (2) defendant gave subsequent statement indicating that there would be indefinite delay of airplane’s first flight due to “anomaly” in wing test; and (3) defendant’s subsequent statement caused defendant's stock price to drop. Plaintiffs failed to adequately plead requisite scienter on part of defendant that demonstrated that defendant’s upper management knew that initial optimistic statement about results of airplane’s tests was unfounded. Moreover, although plaintiffs pleaded in amended complaint that named confidential source could supply evidence that upper management knew that wing test results would delay airplane’s first flight at time of initial statement, record showed that said source did not have any knowledge of wing test results or of any transmission of same to upper management. Remand was required, though, for determination as to whether plaintiffs’ counsel should be sanctioned under Rule 11 where none of plaintiffs’ attorneys had met or talked to confidential source about his knowledge of case until six months after they had named him in amended complaint.