Forum
U.S. Supreme Court
Case Status
Decided
Docket Number
06-484
Term
2006 Term
Oral Argument Date
March 28, 2007
Questions Presented
Whether, and to what extent, a court must consider or weigh competing inferences in determining whether a complaint asserting a claim of securities fraud has alleged facts sufficient to establish a “strong inference” that the defendant acted with scienter, as required under the Private Securities Litigation Reform Act of 1995.
Case Updates
Supreme Court addresses proof of scienter under securities laws
June 21, 2007
As urged by NCLC, the Supreme Court adopted a stricter test for pleading scienter in securities fraud cases than did the Seventh Circuit below, holding that the inference of wrongful mind must be as cogent and compelling as competing inferences.
U.S. Chamber files amicus brief
February 09, 2007
Urging the U.S. Supreme Court to adopt a strict pleading test as to the sufficiency of scienter allegations in securities fraud cases, NCLC reminded the high court that Congress enacted the Private Securities Litigation Reform Act (PSLRA) to curb vexatious litigation. In particular, NCLC described the significant risk of blackmail settlements and highlighted the potential of a stricter pleading standard for avoiding that risk. The courts of appeals have arrived at three different approaches in determining whether the defendant had the proper state of mind to be held culpable, and the Seventh Circuit, in its decision below, developed a particularly weak variant.
Cert. petition granted
January 05, 2007
U.S. Chamber urges Supreme Court to review proof of scienter under securities laws
December 06, 2006
Click here to view the Chamber's brief in support of writ of certiorari.