Law.com Subscribers SAVE 30%
Call 855-808-4530 or email [email protected] to receive your discount on a new subscription.
Pleading Standard for Securities Fraud Complaints
In Tellabs v. Makor Issues & Rights Ltd. (June 21, 2007), the U.S. Supreme Court offered clarity on the requirement in the Private Securities Litigation Reform Act of 1995 (the 'PSLRA') that plaintiffs in securities fraud actions plead with particularity facts giving rise to a 'strong inference' of scienter. Basically, the Court was asked to decide how to address pleadings when there are contrasting inferences with respect to scienter. On this point, the Court held by an 8-1 vote that to qualify as 'strong' within the meaning of ' 21D(b)(2) of the PSLRA, an inference of scienter must be more than 'merely plausible or reasonable.' The Court ruled that the trial court must balance competing inferences raised by the parties' pleadings and before the trial court and that '[a] complaint will survive only if a reasonable person would deem the inference of scienter cogent and at least as compelling as any plausible opposing inference one could draw from the facts alleged.'
There has been some disagreement on the impact of the ruling. Some commentators and most media suggest that the Tellabs decision is a positive ruling for companies and executives, making it more difficult for shareholder-plaintiffs to sue companies and executives or win substantial damages. In contrast, recognizing that the Court is seemingly pro-business, some commentators consider it a minor victory for shareholders that the Court did not adopt Justice Scalia's view (expressed in his concurring opinion) that equally competing inferences cannot establish scienter, the willful intent to commit fraud. In fact, some commentators have gone so far as to suggest that the majority's 'prescriptions' actually do not differ from what courts already follow and that the Court whiffled on a golden opportunity to drastically limit class actions.
The DOJ's Corporate Enforcement Policy: One Year Later
The DOJ's Criminal Division issued three declinations since the issuance of the revised CEP a year ago. Review of these cases gives insight into DOJ's implementation of the new policy in practice.
The DOJ's New Parameters for Evaluating Corporate Compliance Programs
The parameters set forth in the DOJ's memorandum have implications not only for the government's evaluation of compliance programs in the context of criminal charging decisions, but also for how defense counsel structure their conference-room advocacy seeking declinations or lesser sanctions in both criminal and civil investigations.
Use of Deferred Prosecution Agreements In White Collar Investigations
This article discusses the practical and policy reasons for the use of DPAs and NPAs in white-collar criminal investigations, and considers the NDAA's new reporting provision and its relationship with other efforts to enhance transparency in DOJ decision-making.
A Lawyer's System for Active Reading
Active reading comprises many daily tasks lawyers engage in, including highlighting, annotating, note taking, comparing and searching texts. It demands more than flipping or turning pages.
Bankruptcy Sales: Finding a Diamond In the Rough
There is no efficient market for the sale of bankruptcy assets. Inefficient markets yield a transactional drag, potentially dampening the ability of debtors and trustees to maximize value for creditors. This article identifies ways in which investors may more easily discover bankruptcy asset sales.