respect to scienter, under the “strong inference” of scienter standard set forth in the
PSLRA, scienter allegations of a § 10(b) claim will survive a motion to dismiss “if a
reasonable person would deem the inference cogent and at least as compelling as any
opposing inference one could draw from the facts alleged.” Tellabs v. Makor Issues &
Rights, Ltd., 551 U.S. 308 (2007).
In the Eleventh Circuit, it is well-established that the element of scienter requires
a showing of either an “intent to deceive, manipulate, or defraud” or “severe
recklessness.” Mizzaro v. Home Depot, Inc., 544 F.3d 1230, 1238 (11th Cir. 2008);
Bryant, 187 F.3d at 1284. Severe recklessness requires more than “inexcusable
negligence.” Ziemba, 256 F.3d 1194, 1202 (11th Cir. 2001). The Eleventh Circuit has
defined “severe recklessness” as “those highly unreasonable omissions or
misrepresentations that involve not merely simple or even inexcusable negligence, but
an extreme departure from the standards of ordinary care, and that present a danger of
misleading buyers or sellers which is either known to the defendant or is so obvious that
the defendant must have been aware of it.” Bryant, 187 F.3d at 1282 n. 18; McDonald
v. Alan Bush Brokerage Co., 863 F.2d 809, 814 (11th Cir. 1989).
With respect to causation, the PSLRA “expressly imposes on plaintiffs ‘the
burden of proving’ that the defendant's misrepresentations ‘caused the loss for which
the plaintiff seeks to recover.’ ” Dura Pharms., Inc. v. Broudo, 544 U.S. 336, 345-46,
(2005) (quoting 15 U.S.C. § 78u-4(b)(4)). “Loss causation ‘is the causal link between
the alleged misconduct and the economic harm ultimately suffered by the plaintiff.’ ”
Lentell v. Merrill Lynch & Co., 396 F.3d 161, 172 (2d Cir. 2005) (quoting Emergent
Capital Inv. Mgmt., LLC v. Stonepath Group, Inc., 343 F.3d 189, 197 (2d Cir. 2005)).