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U.S. Supreme Court to Hear Appeal Concerning Securities Fraud Pleading Standard | JD Supra

U.S. Supreme Court to Hear Appeal Concerning Securities Fraud Pleading Standard | JD Supra
The U.S. Supreme Court recently agreed to hear an appeal of a Ninth Circuit decision that could have a significant impact on future securities fraud...

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The U.S. Supreme Court has agreed to hear an appeal of a Ninth Circuit decision that could have a significant impact on future securities fraud claims nationwide. The case in question involves the burden plaintiffs bear in pleading facts to support a securities fraud complaint under the Private Securities Litigation Reform Act of 1995 (PSLRA). The case, Nvidia Corp. et al. v. E. Ohman J:Or Fonder AB et al (No. 23-970), centers around allegations that microchip manufacturer Nvidia misled investors about the source of its sales growth. Plaintiffs used expert witness analysis to support their claims, but did not specifically cite internal company documents. The District Court initially dismissed the complaint, but the Ninth Circuit reversed and resuscitated it. Nvidia has argued that the Ninth Circuit decision has deepened a split in the circuit courts concerning the evidence necessary to plead scienter under the PSLRA. The Supreme Court's determination of these issues could resolve the split in the circuits and clarify how public companies should respond to complaints based on expert analysis.

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