Scienter Pleading and Rule 10b-5: Empirical Analysis and Behavioral Implications

Although the volume of private securities class action filings has dropped recently, these lawsuits remain both a significant worry for issuers, investment banks, auditing firms and other potential defendants, and an arguably useful supplement to governmental enforcement of securities antifraud laws.  Because we both teach a course in accounting ethics and accountants’ liability and have found ourselves at a loss to clearly explain to our students the law of scienter pleading in Rule 10b-5 cases against auditors, we undertook research that culminated in an article entitled Scienter Pleading and Rule 10b-5: Empirical Analysis and Behavioral Implications, just published in … Read more

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Editor's Tweet: Professors Robert Prentice and Dain Donelson of University of Texas at Austin law discuss scienter pleading and Rule 10b-5