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Fourth Circuit: Shareholders Face High Bar In Demonstrating Scienter

A recent Fourth Circuit decision held that shareholders must meet a high bar in demonstrating scienter to avoid early dismissal of the case. The decision also shows the fact-intensive approach courts use to distinguish fraudulent statements from those that, even if mistaken, were made innocently.

6 minute readFebruary 01, 2022 at 12:03 AM
By
Michael W. Mitchell
Edward Roche
Fourth Circuit: Shareholders Face High Bar In Demonstrating Scienter

recent decision of the U.S. Court of Appeals for the Fourth Circuit analyzed the "scienter" requirement that a shareholder must meet to prevail under the federal securities laws in showing that the company or its executives fraudulently induced the shareholder to buy or retain shares.

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