Client Alert

Silicon Slippage? Ninth Circuit Shows Signs of Relaxing Pleading Standards in Fraud Claims

July 31, 2004

Peter M. Stone and Jay C. Gandhi

Following its 1999 decision in In re Silicon Graphics Inc. Sec. Litig., the Ninth Circuit U.S. Court of Appeals was generally thought to have adopted one of the strictest standards in the country for pleading securities fraud. Plaintiffs were required to provide “specific facts indicating no less than a degree of recklessness that strongly suggests actual intent.”