June 21, 2007

The big news today, of course, is that with its ruling, the Court enforces the strict pleading standard requiring a "strong inference" intended by Congress when it passed the PSLRA, requiring "more than merely plausible or reasonable -- it must be cogent and at least as compelling as any opposing inference" of scienter. And one has to like this language from Justice Ginsburg: "Private securities fraud actions, however, if not adequately contained, can be employed abusively to impose substantial costs on companies and individuals whose conduct conforms to the law." Scalia has the better of the argument in arguing for still stricter standards than the rule propounded by the majority opinion, but I think Justice Alito is correct that there is not much practical difference between the Scalia and Ginsburg position. I'm quoted in the Forbes.com coverage. Also: Lattman; Parloff; WSJ; AP. Earlier: April 1.