As all the world knows, the Private Securities Litigation Reform Act — which President Bill Clinton vetoed but which Congress passed anyway — toughened the pleading requirements for securities fraud claims.

The Supreme Court, in Tellabs, Inc. v. Makor & Rights, Ltd., 127 S. Ct. 2499 (2007), recognized the enhancement of difficulty by holding that the PSLRA allows a complaint to survive a motion to dismiss "only if a reasonable person would deem the inference of scienter cogent and at least as compelling as any opposing inference one could draw from the facts alleged."  Tellabs, 127 S. Ct. at 2511.

The hardening of the scienter-pleading test would logically mean that the reasonable person wouldn't conclude he, she, or it had a claim until he-she-it learned facts suggesting a strong inference of fraud, right?  Which would have the effect of making a statute of limitations defense harder to prove and easier to whip, correct?

You are so smart.  The Third Circuit held on Friday that "inquiry notice, in securities fraud suits, requires storm warnings indicating that defendants acted with scienter."  Alaska Electrical Pension Fnd v. Pharmacia Corp., Nos. 07-4500 & 07-4564, slip op. at 11 (3d Cir. Jan. 30, 2009).  False statements, standing alone, don't tell an investor he-she-it has a claim.  The investor must also have information that makes the inference of fraudulent intent "cogent and at least as compelling as any opposing inference one could draw" from the information.