On April 25, 1996, plaintiffs Carol Novak and Robert Nieman brought this action on behalf of all purchasers of the common stock of the AnnTaylor Stores Corporation between February 3, 1994, and May 4, 1995 (the "Class Period"). In their complaint, the plaintiffs named two groups of defendants: (1)the AnnTaylor defendants,both the corporation itselfwhich, through its wholly-owned subsidiary, defendant AnnTaylor, Inc., is a specialty retailer of women's clothing, shoes, and accessoriesand several officers at the highest level of management; and (2)the Merrill Lynch defendants,a group of entities and individuals that collectively held a dominant share of AnnTaylor stock and sold a significant fraction of their holdings during the Class Period. The complaintin both its original and amended formsessentially alleges that, during the Class Period, the defendantsmade, or controlled others who made, materially false and misleading statements and omissions concerning the financial performance of AnnTaylor ("the Company"), primarily by failing properly to account for millions of dollars of inventory. According to the plaintiffs, the defendants knowingly and intentionally issued financial statements that overstated AnnTaylor's financial condition by accounting for inventory that they knew to be obsolete and nearly worthless at inflated values and by deliberately failing to adhere to the Company's publicly stated markdown policy. The following facts are taken largely from the plaintiffs' complaint. The plaintiffs' specific allegations focus on AnnTaylor's so-called "Box and Hold" practice, whereby a substantial and growing quantity of out-of-date inventory was stored in several warehouses during the Class Period without being marked down. Internal Company documents ("Weekly Reports")distributed at regular Monday morning merchandise meetings in which the AnnTaylor defendants participateddistinguished between regular inventory and "Box and Hold" inventory. According to the complaint, these reports demonstrated that: (1) much of the "Box and Hold" inventory was several years old and thus unlikely to be sold at full price, if at all; and (2) the levels of such inventory grew significantly during the Class Period, from about 10% to about 34% of total inventory. However, AnnTaylor's public financial statements did not distinguish between types of inventory, nor did AnnTaylor write off any of the "Box and Hold" inventory during the Class Period, allegedly in violation of Generally Accepted Accounting Principles ("GAAP") that required markdowns under these circumstances. Instead, the defendants made or caused to be made a series of positive statements to the public about the status of AnnTaylor's inventories, describing them at various points during the Class Period as "under control," "in good shape," and at "reasonable" or "expected" levels; stating that "no major or unusual markdowns were anticipated"; and attributing rising levels of inventory to growth, expansion, and planned future sales. The plaintiffs contend that this course of conduct amounts to securities fraud. Had AnnTaylor taken appropriate write-downs, they argue, the Company's earnings would have been substantially lower than reported. Thus, the AnnTaylor defendants' alleged deception painted too rosy a picture of the Company's current performance and future prospects and kept the company's stock price at an artificially high level during the Class Period. According to the amended complaint, during this time, many AnnTaylor executives demanded that [the individual AnnTaylor] defendants ... end the Box & Hold practice as it made no business sense and was growing out of control. Defendants' response ... was that AnnTaylor could not "afford" to eliminate or write-down the Box & Hold inventory because doing so would "kill" the Company's reported financial results and/or profit margins and damage the Company on "Wall Street." Ultimately, the defendants were forced to publicly acknowledge serious inventory problemsi.e., that inventories were too high and liquidation would result in much lower fiscal 1995 earnings than expectedat which point AnnTaylor stock prices fell precipitously, to the plaintiffs' detriment. On July 1, 1996, in response to these allegations, the defendants moved to dismiss the action, and on August 16, 1996, the district judge granted a motion by the defendants to stay all discovery pending a ruling on the motions to dismiss pursuant to 15 U.S.C. 78u-4(b)(3)(B). On March 10, 1998, the district court issued an opinion and order granting the defendants' motions to dismiss the complaint.SeeNovak I,997 F.Supp. at 426. The court concluded that "the fatal defect in the complaint lies in its allegations of scienter."Id.at 430. Specifically, the plaintiffs had "fail[ed] to plead facts givingrise to a strong inference of fraudulent intent" in that they did not "allege with sufficient specificity that ... defendants ... were aware that much of their inventory was worthless or seriously overvalued, or were reckless as to whether that was the case."Id.at 430-31. According to the district court, in order to meet the pleading requirement, the plaintiffs needed to identify the confidential sources of their information,see id.at 431-32, include written documentation of the "Box and Hold" practice in their complaint,see id.at 432, and allege facts showing that the Merrill Lynch defendants actually knew about "Box and Hold,"see id.at 434. On April 9, 1998, the plaintiffs filed an amended complaint. The defendants thereafter served motions to dismiss. On November 9, 1998, the district court dismissed the plaintiffs' amended complaint with prejudice.SeeNovak II,26 F.Supp.2d at 660. In the district court's view, the amended complaint failed to remedy the defects of the original one, including lack of particularity in pleading, unnamed sources, and lack of specific evidence of the Merrill Lynch defendants' knowledge of the "Box and Hold" practice.See id.at 660-62. In addition, the district court found "that it would be futile to permit further amendment" of the complaint and thus dismissed it with prejudice.Id.at 663. This appeal followed. The plaintiffs subsequently reached a settlement with the Merrill Lynch defendants and withdrew the appeal as against them. Accordingly, our discussion pertains solely to the claims against the AnnTaylor defendants. In particular, we do not reach the question of control-person liability under 20(a) of the 1934 Act, since this claim pertains primarily to the Merrill Lynch defendants. We are not concerned with 20(a) liability as to the AnnTaylor defendants because they are also alleged to be primary violators under the 1934 Act, who may be held directly liable under 10(b).

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their recommended dosage and duration of treatment?

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10.Business intelligence (BI) is a broad category of application programs which includes