October 24, 2017 Top Story

Ninth Circuit Applies Heightened Pleading for Securities Fraud

Supreme Court’s Omnicare holding extended to Section 10(b) and Rule 10b-5 claims.

Erin Louise Palmer

The U.S. Court of Appeals for the Ninth Circuit extended the U.S. Supreme Court's standard for pleading falsity of opinion statements to securities fraud cases under Section 10(b) of the Securities Exchange Act of 1934 and SEC Rule 10b-5.

iStockphoto by Getty Images

In City of Dearborn Heights Act 345 Police & Fire Retirement System v. Align Technology, Inc., the Ninth Circuit required the plaintiffs to allege both objective and subjective falsity, overruling its prior standard requiring the plaintiffs to allege only objective falsity. ABA Section of Litigation leaders believe the Ninth Circuit's opinion is consistent with the heightened pleading requirements under Federal Rule of Civil Procedure 9(b) and the Private Securities Litigation Reform Act (PSLRA).

Premium Content For:
  • Litigation Section
Join - Now