Pat Gudridge:
From the front page of the New York Times: “Investors' Suits Face Higher Bar, Supreme Court Rules.”
Issued yesterday, the Court's majority opinion in the Tellabs case starts from the proposition that plaintiffs bringing securities fraud suits must allege (in their initial complaints — in advance of discovery) facts in sufficient detail to show statements attributable to defendants to be false either because of affirmative misrepresentations or because of notable omissions — and also facts suggesting defendants knew the statements were false (the so-called scienter requirement). There's nothing new in this. But the majority also held (this was new) that, to be well-pled, facts regarding scienter, more or less like facts regarding falsity, must appear from the allegations to suggest that inferences of scienter are not just plausible or reasonable — but rather cogent, at least as compelling as any opposing suggestion, given the alleged facts, that there was no knowledge of falsity on the part of defendants.
Too complicated, too boring: who cares?
