Some Insights Into The Effects Of Tellabs

Law360, New York (May 5, 2009, 12:00 AM EDT) -- Two years ago, in Tellabs v. Makor Issues & Rights Ltd., the Supreme Court set out a “workable construction” of the statutory requirement that plaintiffs in Section 10(b) cases plead a “strong inference of scienter.”[1]

In addition to announcing the “cogent inference” requirement, Tellabs instructed courts to analyze all of available facts and to consider all plausible inferences from those facts, not only inferences favorable to the plaintiffs.[2]

These instructions give a court considerable leeway to decide which possible inferences about a defendant’s state of mind...
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