Under the Private Securities Litigation Reform Act (the “PSLRA”), complaints in private securities actions must “state with particularity facts giving rise to a strong inference that the defendant acted with the required state of mind.” 15 U.S.C. §78u-4(b)(2) (2010). For actions under section 10(b), 78 U.S.C. §78j(b) (2010), and Rule 10b-5, this requires plaintiffs to plead with particularity facts giving rise to a strong inference that each defendant acted with scienter—the intent to deceive, manipulate or defraud. Ernst & Ernst v. Hochfelder, 425 U.S. 185, 194 and n. 12 (1976).
In 2007, the Supreme Court defined a strong inference of scienter as
more than merely plausible or reasonable—it must be cogent and at least as compelling as any opposing inference of non-fraudulent intent
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