6th Circ. Corporate Scienter Test Leaves Cos. Vulnerable

Law360, New York (October 15, 2014, 8:22 PM EDT) -- The Sixth Circuit recently tried to strike a middle ground between divergent opinions around the pleading standards for corporate scienter, but defense attorneys say the test it adopted leaves companies wide open to claims they knew about wrongdoing simply because someone along the chain of command did.

On Friday, the appellate court issued an opinion in a securities fraud class action accusing health care provider Omnicare Inc. of misleading investors about its compliance with federal Medicare and Medicaid billing rules. But while the three-judge panel upheld a lower court's dismissal of the claim, it also used the opportunity to put forth...

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