The SEC’s decision to file an amicus brief in support of the defendants in the Tellabs case before the U.S. Supreme Court has increased the case’s exposure.
The Los Angeles Times had an article in yesterday’s edition questioning whether Chairman Cox “is pushing for restrictions on investors’ ability to sue.” The SEC’s brief has given critics a excuse to break out the “fox guarding the henhouse” analogies (again) based on Chairman Cox’s sponsorship of the PSLRA when he served in Congress.
Meanwhile, the New York Law Journal has a lengthy preview (subscrip. req’d) of the Tellabs argument. The authors conclude: “At a minimum, it seems likely that the Court will agree with the majority of circuits that innocent inferences must at least to some extent by taken into consideration as part of the context necessary to judging whether a plaintiff’s allegations give rise not merely to some inference of scienter but to a ‘strong’ inference.”
The 10b-5 Daily 