The Supreme Court has granted a petition for writ of certiorari asking whether the proper liability standard in cases brought under Section 14(e) of the Exchange Act, which prohibits material misstatements or omissions in connection with a tender offer, is negligence instead of intent or scienter.  The Plaintiffs in this putative class action allege that Defendants failed to disclose unfavorable information about a proposed merger.  The district court granted Defendants’ motion to dismiss, finding that Plaintiffs insufficiently pleaded facts that showed scienter.  Departing from the decisions of the Sixth, Second, Eleventh, Third, and Fifth Circuits, the Ninth Circuit reversed, holding that a Section 14(e) plaintiff may allege negligence.

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