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Supreme Court hears argument on pleading standard in securities suit over crypto-related sales
Summary
At oral argument in case No. 23970, advocates disputed whether the Private Securities Litigation Reform Act requires plaintiffs to plead the contents of internal documents and how expert reports may factor into showing scienter. Petitioners urged reversal of the Ninth Circuit; respondents and the Solicitor General urged a fact‑bound approach.
The Supreme Court heard argument on a securities pleading issue—whether plaintiffs must plead, with particularity, the contents of internal company documents when alleging that a CEO made false public statements about company sales.
Petitioner’s counsel told the justices that Congress “required plaintiffs to, quote, state with particularity, facts giving rise to a strong inference the defendant acted with scienter,” and urged the Court to reverse the Ninth Circuit’s decision as a roadmap for “fraud by hindsight.” Counsel pointed to the complaint’s handling of internal reports and an expert model and said the filings failed to show “what the CEO actually saw and when he knew it.”
Respondent counsel and the government urged a narrower remedy. The respondent argued the court of appeals applied a lawful, holistic TELABS/Matrix analysis, pointing…
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