Corporate Litigation: Pleading Corporate Scienter: Circuits Split on Standard
In his Corporate Litigation column published in the New York Law Journal, Joe McLaughlin writes about the differing approaches to evaluating corporate scienter adopted by courts addressing securities class action complaints. This column examines
In re Omnicare, Inc. Sec. Litig., a recent case where the U.S. Court of Appeals for the Sixth Circuit recently asked, “must the person misrepresenting a material fact in the name of the corporation have also done so with scienter, or is it enough that some person in the corporate structure had the requisite state of mind?” The Sixth Circuit formulated a “middle ground” approach in response, combining elements of the restrictive and liberal tests adopted by other courts of appeal over the last decade.
Yafit Cohn, an associate at the Firm, assisted in the preparation of this article.