Tag Archives: Scienter

U.S. Supreme Court Unanimously Reverses Sixth Circuit in Closely Watched Securities Fraud Case

The U.S. Supreme Court unanimously reversed the Sixth Circuit yesterday in a securities fraud action brought against Omnicare, Inc., a Cincinnati pharmaceuticals services company, under Section 11 of the Securities Act of 1933, 15 U.S.C. § 77k.  See Omnicare Inc. v Laborers District Council Construction Industry Pension Fund, Case No. 13-435 (2015) (PDF).  In siding … Continue Reading

Sixth Circuit Revives Securities Class Action

Creating a split with the Second and Ninth Circuits, the Sixth Circuit has held that Section 11 of the Securities Act, 15 U.S.C. § 77k, which creates liability for false statements in registration statements, provides for strict liability and so does not require allegations of knowledge of falsity.  The panel in Ind. State Dist. Council … Continue Reading

Sixth Circuit Eschews Helwig Factors; Follows the “Holistic” Scienter Examination Set Forth By the Supreme Court

In Ashland, Inc. v. Oppenheimer, No. 10-5305 (6th Cir. July 28, 2011).pdf, the Sixth Circuit eschewed the checklist of non-exhaustive factors set forth in Helwig v. Vencor Inc., 251 F.3d 540, 552 (6th Cir. 2001).pdf, for analyzing scienter in securities-fraud cases.  Instead, the Sixth Circuit, in an opinion by Judge Cook, followed the “holistic” approach … Continue Reading

Sixth Circuit Provides More Guidance in Securities Fraud Cases

“In the end, plaintiffs’ allegations do not raise a strong inference that Ernst & Young acted with scienter in affirming Accredo’s allegedly fraudulent accounting.  Conclusory allegations about what Ernst & Young must or should have known while auditing Accredo do not amount to specific allegations that show material misstatements or omissions committed with recklessness.  Plaintiffs … Continue Reading