Pleading Scienter Under the Federal Securities Laws: What Creates a Strong Inference of Fraudulent Intent?

United States Law Articles in English (2008)

Mr Alan Glickman - Schulte Roth & Zabel LLP

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U.S. Court of Appeals for the 5th Cir. - James M. Nathenson, on Behalf of Himself and all Others Similarly Situated; Dsam Global Value Fund Ltd; Jonathan Margalit; Amit Sanghvi; Jianbo Xie; John Derosa; Robert Strassman; Dean Hagen; Arno Hausmann, Plaintiffs-Appellants, v. Zonagen Inc; Et Al, Defendants, Zonagen Inc; Joseph Podolski; Steven Blasnik; M Sutter, Defendants-Appellees., 267 F.3d 400 (5th Cir. 2001)

U.S. Court of Appeals for the 10th Cir. - City of Philadelphia, Acting Through Its Board of Pensions and Retirement, and Ronald T. Goldstein, on Behalf of Themselves and all Others Similarly Situated, Plaintiffs-Appellants, v. Fleming Companies, Inc.; Robert E. Stauth; R. Randolph Devening; Donald N. Eyler; Kevin J. Twomey, Defendants-Appellees., 264 F.3d 1245 (10th Cir. 2001)

U.S. Court of Appeals for the 8th Cir. - Florida State Board of Administration, Plaintiff - Appellant, v. Green Tree Financial Corporation; Lawrence M. Coss; Robert D. Potts; Edward L. Finn, Defendants - Appellees. Securities and Exchange Commission, Amicus on Behalf of Appellant. in Re: Green Tree Financial Corporation, Stock Litigation, Vivian Chill, on Behalf of Herself and Others Similarly Situated, Plaintiffs-Appellants, v. Green Tree Financial Corporation: Lawrence M. Coss; Robert D. Potts; Richard G. Evans; Edward L. Finn; Joel H. Gottesman, Defendants - Appellees. in Re: Green Tree Financial Corporation: Options Litigation June Shapiro, on Behalf of Herself and all Others Similarly Situated, Plaintiffs - Appellants, v. Green Tree Financial Corporation; Lawrence M. Coss; Robert D. Potts; Robley D. Evans; Edward L. Finn; Joel H. Gottesman, Defendants - Appellees., 270 F.3d 645 (8th Cir. 2001)

U.S. Court of Appeals for the 2nd Cir. - Sarah B. Shields, Individually and as Representative of all Others Similarly Situated, Plaintiff-Appellant, v. Citytrust Bancorp, Inc., George F. Taylor and Irwin Engelman, Defendants-Appellees., 25 F.3d 1124 (2nd Cir. 1994)

U.S. Court of Appeals for the 6th Cir. - in Re: Comshare, Incorporated Securities Litigation. Harry M. Hoffman, Et Al., Plaintiffs-Appellants, v. Comshare, Inc., Et Al., Defendants-Appellees., 183 F.3d 542 (6th Cir. 1999)


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Pleading Scienter Under the Federal Securities Laws: What Creates a Strong Inference of Fraudulent Intent?

Co-written by Margaret A. Jacobs & Karen E. Siciliano

One of the keys to curtailing litigation costs for public companies in any securities class action is dismissal at an early stage. Heightened standards for pleading defendants' state of mind increase the chances of early dismissal and also enhance defendants' likelihood of prevailing on the merits.

The Private Securities Litigation Reform Act of 1995 ("PSLRA") amended the Securities Act of 1933 and the Securities Exchange Act of 1934. Among other things, the PSLRA demanded greater particularity in pleading misleading statements and omissions in secur...



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