Court To Weigh If Co. Can Have Scienter If Execs Don't

Law360, New York (January 25, 2008, 12:00 AM EST) -- In an important case for scienter, a federal appeals court will hear arguments Wednesday over a district court's decision to dismiss a securities fraud action against two corporate officers accused of misrepresenting information to investors while upholding a claim against the officers' employer.

The central question of Teamsters Local 445 Freight Division Pension Fund v. Dynex Capital Inc. et al. is this: At the pleading stage, can a company be held to have possessed sufficient scienter under the Private Securities Litigation Reform Act of 1995 to...
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