Scienter As Element of Securities Fraud Claim
In the United States, in order to prevail in a securities fraud claim under Section 10(b) of the Securities Exchange Act of 1934, a plaintiff must allege and prove that the defendant acted with scienter. The Private Securities Litigation Reform Act of 1995 added the requirement that a plaintiff must plead facts giving rise to a "strong inference" of scienter. The meaning of scienter under this law has been highly controversial since the enactment of the PSLRA. In 2007, the United States Supreme Court issued a decision in which it clarified what was to be understood as a "strong inference". In Tellabs, Inc. v. Makor Issues & Rights, LTD (21 June 2007), by an 8-1 ruling, the Court defined the standard that the plaintiff should meet in order to proceed with a securities fraud litigation : a complaint must show "cogent and compelling evidence" of scienter.
Read more about this topic: Scienter
Famous quotes containing the words claim, fraud and/or element:
“Nobody is so constituted as to be able to live everywhere and anywhere; and he who has great duties to perform, which lay claim to all his strength, has, in this respect, a very limited choice. The influence of climate upon the bodily functions ... extends so far, that a blunder in the choice of locality and climate is able not only to alienate a man from his actual duty, but also to withhold it from him altogether, so that he never even comes face to face with it.”
—Friedrich Nietzsche (1844–1900)
“Things gained through unjust fraud are never secure.”
—Sophocles (497–406/5 B.C.)
“An element of exaggeration clings to the popular judgment: great vices are made greater, great virtues greater also; interesting incidents are made more interesting, softer legends more soft.”
—Walter Bagehot (1826–1877)