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| 2001 News and Press Releases |
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HEADLINE ARCHIVED:
Standard For Scienter
By: Gerard Pecht and Glen Banks
The National Law Journal. December 3, 2001
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Excerpt: THE PRIVATE Securities Litigation Reform Act (PSLRA) requires a plaintiff to "state with particularity facts giving rise to a strong inference" of scienter. 15 U.S.C. 78u-4(b)(2). District courts initially differed over how a plaintiff could meet this burden. See Richard H. Walker and J. Gordon Seymour, "Recent Judicial and Legislative Developments Concerning the Private Securities Fraud Class Action," 40 Ariz. L. Rev. 1003 (1998). As circuit courts have considered the issue, a common standard is emerging. Recently, in Nathenson v. Zonagen Inc., 2001 U.S. App. Lexis 20902 (5th Cir. Sept. 25, 2001), and City of Philadelphia v. Fleming Cos. Inc., 264 F.3d 1245 (10th Cir. 2001), the U.S. courts of appeals for the 5th and 10th circuits gave further guidance on the issue. This article will review the evolution of the pleading standard for scienter.
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