Carbonite Investors Win New Try at Dud Product Securities Suit

Carbonite Inc. investors may try again at holding the company liable for allegedly touting a new product it knew didn’t actually work, after the First Circuit revived their case Wednesday.

Investors say the software company promoted its launch of a new data-backup product, the Carbonite Server VM Edition, despite knowledge of problems that eventually led it to halt sales. They properly alleged Carbonite knowingly or recklessly made materially misleading statements about VME, the U.S. Court of Appeals for the First Circuit said.

Carbonite argued that some of its challenged statements were “merely optimistic opinions that are not actionable as ...