Supreme Court Heightens Pleading Standard

Law360, New York (June 21, 2007, 12:00 AM EDT) -- Securities class actions will now have to meet a heightened pleading standard, thanks to a U.S. Supreme Court decision that strengthens the requirements for proving scienter.

In an 8-1 opinion handed down in Tellabs Inc. v. Makor Issues & Rights Ltd on Thursday, the Supreme Court ruled that “an inference of scienter must be more than merely plausible or reasonable—it must be cogent and at least as compelling as any opposing inference of nonfraudulent intent."

Authored by Justice Ruth Bader Ginsburg, the opinion not only states...
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