Alison Frankel provided a helpful new post on the conclusions reached by business professors after a study of 144 federal court decisions on scienter in accounting class action cases. The conclusion?
"The law of pleading scienter against external auditors in (securities fraud) cases is so vague and inconsistent that, as a practical matter, judges have virtually unfettered discretion to reach any conclusion they deem appropriate."
See Alison’s post and links for all the specifics. One wonders when we will see similar studies on other groups of Twiqbal rulings. The financial industry certainly would be in much worse shape were it not for myriad Twiqbal rulings knocking out cases that plainly were adequately pleaded under the prior Conley v. Gibson standard.