Heightened Pleading Requirements
In adopting the PSLRA in 1995, Congress was persuaded that the arguments of the defense bar had merit. The legislative history reveals that Congress passed the PSLRA to curb the "abusive practices committed in private securities litigation" including "the routine filing of lawsuits against issuers of securities and others whenever there is a significant change in an issuer's stock price, without regard to any underlying culpability of the issuer, and with only faint hope that the discovery process might lead eventually to some plausible cause of action."
To reduce the number of purportedly frivolous Rule 10b-5 lawsuits that survive motions to dismiss, the PSLRA raised the pleading standards (the specificity and strength of the factual allegations that must be alleged in the plaintiff's complaint) in three specific ways. These changes are among the most significant aspects of the PSLRA.
Read more about this topic: Private Securities Litigation Reform Act
Famous quotes containing the words heightened and/or pleading:
“Compared to other parents, remarried parents seem more desirous of their child’s approval, more alert to the child’s emotional state, and more sensitive in their parent-child relations. Perhaps this is the result of heightened empathy for the child’s suffering, perhaps it is a guilt reaction; in either case, it gives the child a potent weapon—the power to disrupt the new household and come between parent and the new spouse.”
—Letty Cottin Pogrebin (20th century)
“Sweet, let me go! Sweet, let me go!
What do you mean to vex me so?
Cease, cease, cease your pleading force!”
—Unknown. Sweet, Let Me Go! (L. 1–3)