February 24, 2015 Articles

Courts Split on SEC Forms 4 for the Truth of Their Contents on Motions to Dismiss

To date, no federal circuit court has squarely addressed this issue

By Som P. Dalal and Howard S. Suskin

he Private Securities Litigation Reform Act of 1995 requires a plaintiff filing a securities fraud class action complaint pursuant to section 10(b) of the Securities Exchange Act of 1934 (the Exchange Act) to “state with particularity facts giving rise to a strong inference that the defendant acted with the required state of mind.” 15 U.S.C. § 78u-4(b)(2). The United States Supreme Court has explained that the “required state of mind” is “scienter, a mental state embracing intent to deceive, manipulate, or defraud.” Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 319 (2007).

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