Cahill Gordon Discusses Second Circuit Decision on Corporate Scienter in Securities Fraud

The lynchpin of many securities fraud cases is whether a plaintiff can establish with particularity that a defendant acted with scienter (i.e., fraudulent intent). Where the defendant is an individual person, this question may be relatively straightforward. Where the defendant is a corporation, however, it can be more complicated: a plaintiff must demonstrate the misconduct was not the result of mismanagement of lower-level employees but rather the corporation’s fraudulent conduct.

On May 27, 2020, in Jackson v. Abernathy,1 the United States Court of Appeals for the Second Circuit, in a per curiam decision, clarified the standard for pleading … Read more