"Holistic" Review of Scienter Allegations in Securities Fraud Class Actions Resulting in Increased Number of Dismissals

Scienter is the intent to defraud, and it is a required element of a securities fraud claim. In 2011, the Supreme Court issued the Matrixx decision, which reaffirmed the Court’s Tellabs holding that a securities fraud claim is adequately plead 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.” In Matrixx, the Court also reaffirmed that scienter allegations are to be considered “collectively” or “holistically."