Six Flags Investor Gets Suit Over Stalled China Projects Revived

A Six Flags Entertainment Corp. investor adequately alleged that two company executives committed securities fraud by misrepresenting the progress of theme park projects in China, the Fifth Circuit said Wednesday.

The lower court applied too great a “discount” to allegations derived from an anonymous former employee, Judge Leslie H. Southwick said for the appellate panel. “Discount does not mean unfettered discretion to discard,” he said.

The investor, an Oklahoma firefighters’ retirement fund, along with other shareholders, sued on behalf of Six Flags in a derivative suit. They alleged the company and the executives publicly said the theme parks’ development, in ...