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ARTICLE · 08 MAY 2008

Emerging Issues In Securities Litigation: Pleading Scienter In 10b-5 Actions After Tellabs

Mayer Brown
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The Supreme Courts Tellabs decision has been widely seen as making it more difficult for private securities fraud plaintiffs to satisfy the Private Securities Litigation Reform Acts (PSLRA) requirement of pleading a "strong inference" of scienter, by holding that such plaintiffs "must plead facts rendering an inference of scienter at least as likely as any plausible opposing inference."

United StatesLitigation, Mediation & Arbitration
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Originally published April 2008

Keywords: Tellabs, Boston Scientific, Private Securities Litigation Reform Act, Ernst & Ernst, Hochfielder, fraud, class action, scienter, inference, Makor Issues & Rights, Ltd. v Tellabs, Last Atlantis Capital LLC, In re Guidant Corp. Sec. Litig., Pugh v Tribune Co., subsidiary, SEC, ATSI Communications, Inc. v. Sharr Fund, Ltd., Monster Worldwide, Pfizer, compensation, Paincare Holdings

The Supreme Courts Tellabs decision1 has been widely seen as making it more difficult for private securities fraud plaintiffs to satisfy the Private Securities Litigation Reform Acts (PSLRA) requirement of pleading a "strong inference" of scienter, by holding that such plaintiffs "must plead facts rendering an inference of scienter at least as likely as any plausible opposing inference."2 In Tellabs, the Supreme Court rejected the approach of some of the federal circuits most

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