The Private Securities Litigation Reform Act of 1995 requires plaintiffs alleging securities fraud to plead a “strong inference” of scienter (i.e., fraudulent intent) on the part of the defendants to survive a motion to dismiss. Exactly how to apply this standard, however, has been the subject of constant litigation. Recent notable judicial decisions have addressed, among other topics, what is necessary to adequately plead the scienter of a corporate defendant, the use of control person liability, and the role of insider stock sales in establishing a motive to commit fraud.
The author of The 10b-5 Daily, Lyle Roberts (Wilson Sonsini Goodrich & Rosati), will be chairing a Practising Law Institute telephone briefing on this topic on Thursday, January 20 at 1 p.m. ET. The panelists are Sam Rudman (Lerach Coughlin Stoia Geller Rudman & Robbins) and Bruce Carton (Executive Director, Securites Class Action Services, Institutional Shareholder Services). CLE credit is available. Click here to register.