Tellabs, Inc. v. Makor Issues & Rights, Ltd., No. 06-484

Originally published June 21, 2007

http://www.supremecourtus.gov/opinions/06pdf/06-484.pdf.

In an effort to curb abusive securities fraud litigation, the Private Securities Litigation Reform Act of 1995 ("PSLRA") requires plaintiffs to "state with particularity facts giving rise to a strong inference that the defendant acted" with scienter, i.e., that the defendant’s intention was to deceive, manipulate, or defraud. 15 U.S.C. § 78u-4(b)(2) (emphasis added). Today, the Supreme Court held that, in order to qualify as "strong," "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."