On April 20, 2018, the Ninth Circuit ruled that shareholder claims for false or misleading tender offer disclosures under Section 14(e) of the Securities Exchange Act of 1934 require a mere showing of negligence, rather than fraudulent intent (scienter). This holding departs from longstanding rulings by five other federal appeals courts (the Second, Third, Fifth, Sixth and Eleventh circuits) that have found scienter to be required for Section 14(e) claims.

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Posted by Cooley