The chief judge of the Third Circuit today wrote an opinion upholding dismissal of a securities fraud complaint under the Private Securities Litigation Reform Act of 1995.  The court applied the "cogent and at least as compelling" standard that Tellabs, Inc. v. Makor Issues & Rights, Ltd., 127 S. Ct. 2499, 2510 (2007), set for inferring scienter PSLRA-style.  Winer Family Trust v. Queen, No. 05-3622 (3d Cir. Sept. 24, 2007).

The court also joined the Fifth and Seventh Circuits in explicitly holding that the "group pleading doctrine" didn’t survive the PSLRA.  Slip op. at 38 (following Fin. Acquisition Partners L.P. v. Blackwell, 440 F.3d 278, 287 (5th Cir. 2006) and Makor Issues & Rights, Ltd. v. Tellabs, Inc., 437 F.ed 588, 602-03 (7th Cir. 2006), rev’d on other grounds, 127 S. Ct. 2499 (2007)).  The doctrine allowed plaintiffs to allege that a group of defendants did bad stuff without specifying who in the group actually did it.

Barry Barnett

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