CA5 How to Plead Securities Fraud

Plotkin v. IP Axess, is an interesting opinion by Judge Edith Jones in a securities fraud action. It is interesting in the way it lays out the exacting pleading requirements for both the representations and scienter for fraud (particularly in the securities fraud context) under Fed.R.Civ.Pro. 9(b). The court below had dismissed the action, and the Fifth Circuit reverses in part, finding that a securities fraud case was stated as to one of the press releases of the defendant IP Axess. If you want a primer in how to plead fraud, or how to attack a complaint for not adequately pleading fraud, it’d be a good place to start. 

Comments

[Happy Fun Lawyer]

This is actually a pretty run-of-the-mill case, although I wasn't aware that the 5th Circuit's scienter standard was quite so exacting. (The various circuits have widely divergent requirements for pleading securities fraud). Does it change the law of the 5th Circuit in any way, to your knowledge?

And anyone interested in the subject should of course read the Supreme Court's just-released decision in Dura Pharmaceuticals, about which Prof. Hurt of The Conglomerate and I had an interesting conversation earlier this week. (http://www.theconglomerate.org/2005/04/between_a_rock_.html)

[TomFreeland]

I was not aware the pleading requirements were so exacting for scienter, either; I found it interesting for that reason, and for the way it spelled out the pleadings requirements. The case itself was not big news, but I found it interesting as a here's-a-primer-on-pleading-securities-fraud case.