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Supreme Court Establishes New National Standard For Pleading Securities Fraud Cases

On June 21, 2007, the Supreme Court ruled that a plaintiff filing a federal securities fraud complaint must do more than plead facts sufficient to support a reasonable inference that each defendant acted with scienter, or wrongful intent. In Tellabs v. Makor Issues & Rights, Ltd., No. 06-484 (June 21, 2007), an 8-1 majority of the Court resolved a split among the Circuit Courts over the interpretation of the governing statute, which mandates that a plaintiffs complaint must support a strong inference of scienter in order to survive a motion to dismiss.

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