Law Commons^™

Speech Without Speakers: Eliminating Artificial Barriers To Pleading Corporate Scienter In Securities Fraud Claims, Jennifer Ligansky

Fordham Journal of Corporate & Financial Law

To successfully plead securities fraud claims under Rule 10b–5, the Private Securities Litigation Reform Act (“PSLRA”) requires that plaintiff-investors raise a “strong inference” that the defendant acted with scienter when issuing a false statement. But pleading scienter presents a challenging issue when the defendant is not a person, but an entity. When the defendant is a corporation, U.S. Circuit Courts of Appeals have adopted different approaches for determining whether the plaintiff has pleaded a strong inference of scienter. Some circuits hold that plaintiffs can raise a strong inference of corporate scienter only if the complaint identifies a speaker who knew …

Paper Dragon Thieves, J.S. Nelson

J.S. Nelson

The Corporate Shell Game, J.S. Nelson

J.S. Nelson

"We're Cool" Statements After Omnicare: Securities Fraud Suits For Failures To Comply With The Law, James D. Cox

Faculty Scholarship

As part of a symposium celebrating the multiple contributions of the late Alan Bromberg, this article examines implications flowing from the Supreme Court’s recent decision in Omnicare Inc. v. Laborers District Council Construction Industry Pension Fund. Because Omnicare lands so squarely on the Court’s earlier opaque opinion in Virginia Bankshares, Inc. v. Sandberg addressing the treatment of the materiality of opinion statements, Omnicare is the new currency in the realm that will have far-reaching implications. In Virginia Bankshares, the Supreme Court quickly concluded shareholders would attach significance to the board of directors’ statement that the cash-out merger …

Form Vs. Function In Rule 10b-5 Class Actions, Amanda M. Rose

Vanderbilt Law School Faculty Publications

The Supreme Court’s widely anticipated decision last term in Halliburton Co. v. Erica P. John Fund, Inc. did little to change the fundamental landscape of securities fraud litigation in the United States. Rule 10b-5 class actions premised on the “fraud-on-the-market” presumption of reliance may still be brought, although it is now clear that defendants may present evidence of lack of price distortion to rebut that presumption at the class certification stage. Halliburton does, however, raise a variety of new questions that will keep plaintiffs’ lawyers and defense counsel fighting for years to come. Determining the answers to these questions will …

Stuck Between A Rock And A Hard Place: Are Public Accounting Firms Subject To Diverging Standards Of Conduct Between Federal Courts And The Pcaob In Securities Fraud Claims?, Pierre Ciric

Journal of Business & Technology Law

No abstract provided.

Global Expansion Of National Securities Laws: Extraterritoriality And Jurisdictional Conflicts, Junsun Park

The University of New Hampshire Law Review

[Excerpt] “As securities fraud has grown increasingly transnational, it has become necessary to expand the reach of anti-fraud provisions to persons and entities participating in global securities markets. So far, however, no single antifraud provision exists to govern the entire global marketplace. Although each country strives to combat international securities fraud by using its own regulatory regime, problems can develop when extraterritorial application of national securities laws leads to regulatory overlapping or conflicts. In light of these problems, it is necessary to set forth clear guidelines for determining whether national securities laws can apply extraterritorially and, if so, how far …

Understanding Causation In Private Securities Lawsuits: Building On Amgen, James D. Cox

Faculty Scholarship

With Amgen, the Supreme Court’s majority once again holds that inquiry into the alleged market impact of a misrepresentation is not required to invoke fraud on the market approach to causation so that the class can be certified. Rather than just leaving matters where they have been since the Supreme Court’s muddled encounter with causation in Basic Inc. v. Levinson, the Supreme Court’s most recent decision appears to relax some earlier-held tenets with respect to markets believed sufficiently efficient for fraud on the market to be invoked. This Article not only identifies the central flaw of Basic that has over …

What Were They Thinking? Insider Trading And The Scienter Requirement, Donald C. Langevoort

Georgetown Law Faculty Publications and Other Works

On its face, the connection between insider trading regulation and the state of mind of the trader or tipper seems intuitive. Insider trading is a form of market abuse: taking advantage of a secret to which one is not entitled, generally in breach of some kind of fiduciary-like duty. This chapter examines both the legal doctrine and the psychology associated with this pursuit. There is much conceptual confusion in how we define unlawful insider trading—the quixotic effort to build a coherent theory of insider trading by reference to the law of fraud, rather than a more expansive market abuse standard—which …