CA1: not enough to allege scienter for purposes of the PSLRA

Rodriguez-Ortiz v. Margo Caribe, Inc., No. 06-1765 (6/19/07). This case deals with the ever-present question of “how much particularity is enough” to meet the pleading standards of the Private Securities Litigation Reform Act of 1995 (PSLRA), 15 U.S.C. § 78u-4(b). The underlying claim involves an alleged failure of a former employer to allow a former employee to exercise his stock options after failed negotiations with an executive as to the terms of his resignation (which the company called a dismissal.) The First looks at the complaint and determines that for the securities claims, there just isn’t any specifics regarding the defendant’s scienter or an “intent to deceive” when the underlying contract was signed.

Apparently the other claims (i.e. contract) were not dismissed.