Palo Alto Networks Fends Off Class Claims Over 28% Stock Drop

Palo Alto Networks Inc. investors didn’t adequately allege that misrepresentations propped up the cybersecurity company’s stock price before its largest-ever selloff, a federal court ruled.

The investors failed to show financial projections, statements about sales strategies, and risk disclosures were false when made, Judge Charles R. Breyer said Friday for the US District Court for the Northern District of California. They also didn’t show the necessary level of intent for securities fraud, or insider trading by CEO Nikesh Arora, Breyer said.

• The proposed class action alleged that Palo Alto Networks and its executives touted a sales strategy emphasizing streamlined access ...