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‘Confidential Witnesses’ Under the Private Securities Litigation Reform Act

'Confidential witnesses' can offer plaintiffs a strategic advantage in the early stages of a securities fraud case. Courts must accept well-pleaded allegations at the motion to dismiss stage, even if they are anonymous. A critical task for any court reviewing a complaint with confidential witness allegations is to scrutinize the reliability of these claims.

10 minute read September 01, 2025 at 12:03 AM
By
Jay Dubow , Erica H. Dressler and Milica Krnjaja
‘Confidential Witnesses’ Under the Private Securities Litigation Reform Act

Plaintiffs pursuing securities fraud claims under Section 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934 face the heightened pleading standards imposed by both Federal Rule of Civil Procedure 9(b) and the Private Securities Litigation Reform Act (PSLRA).

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