By Taylor Washburn (June 15, 2017, 2:40 PM EDT) -- In Brennan v. Zafgen Inc., 853 F.3d 606, (1st Cir., April 7, 2017), the First Circuit affirmed a District of Massachusetts decision dismissing claims against Zafgen Inc., a biopharmaceutical developer, and its CEO, Dr. Thomas Hughes. Judge Norman Stahl, writing for a panel that included retired U.S. Supreme Court Justice David Souter (sitting by designation), concluded that the plaintiffs' complaint did not allege facts giving rise to the "cogent and compelling" inference of scienter required by the Reform Act. Id. at *609 (quoting Tellabs Inc. v. Makor Issues & Rights Ltd., 551 U.S. 308, 324 (2007)). The Brennan opinion reaffirmed a vital point about scienter that is often misunderstood — namely, where a plaintiff alleges a defendant did not disclose a material fact, it is not enough for that plaintiff to establish that the defendant was aware of the fact. Rather, scienter requires that the defendant knew that omission of this fact risked misleading investors....