Tellabs, Inc. v. Makor Issues and Rights, Ltd.

In Tellabs, Inc. v. Makor Issues and Rights, Ltd., an 8-1 U.S. Supreme Court curtailed abusive shareholder lawsuits by interpreting § 21D(b)(2) of the Private Securities Litigation Reform Act of 1995 (PSLRA), 109 Stat. 737, to require an inference of scienter that is more than merely plausible or reasonable. The alleged scienter must be cogent and at least as compelling as any opposing inference of nonfraudulent intent.