A great debate–at least among securities lawyers–continues to simmer in the circuits over the pleading standards required by the Private Securities Litigation Reform Act of 1995 (PSLRA). But the question of whether pleading mere or deliberate recklessness–or something in between–is necessary to withstand a motion to dismiss does not address what happens if a plaintiffs’ suit actually makes it to trial.
A class action brought under the PSLRA has finally gone to trial, and the jury’s verdict in favor of the defendant, accounting firm BDO Seidman, suggests that a shareholder suit that makes it past the pleading stage will still find it tough going if the success of the litigation turns on proving recklessness.
