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that the defendant had a duty to disclose; (2) the defendants knew or believed that the

representation was false or made the representation with a reckless indifference to the

truth; (3) the defendants intended to induce the plaintiff to act or refrain from acting; (4)

the plaintiff acted in justifiable reliance on the representation; and (5) the plaintiff was

injured by its reliance.109 Under Court of Chancery Rule 9(b), a heightened pleading

standard applies to fraud claims requiring particularized fact pleading. “In all averments

of fraud . . . the circumstances constituting fraud . . . shall be stated with particularity.

Malice, intent, knowledge and other condition of mind of a person may be averred

generally.”110 Similarly, a claim of conspiracy to commit fraud must be pleaded with

particularity.111 The factual circumstances that must be stated with particularity refer to

the time, place, and contents of the false representations; the facts misrepresented; the

identity of the person(s) making the misrepresentation; and what that person(s) gained

from making the misrepresentation.112 Although Rule 9(b) provides that “knowledge . . .

may be averred generally,” where pleading a claim of fraud has at its core the charge that

the defendant knew something, there must, at least, be sufficient well-pled facts from

109

, 2006) (citing

, 891 A.2d 1032, 1050 (Del. Ch. Feb. 14, ., 889 A.2d 954, 958 (Del. 2005));

110 111

, ., 462 A.2d 1069, 1074 (Del. 1983). Del. Ct. Ch. R. 9(b). , 1998 WL 914265, at *3 (Del. Ch. Dec. 21, 1998); , 558 A.2d 1062, 1066 (Del. Ch. 1989).

112

Aug. 26, 2005) (citing

, 2005 WL 2130607, at *7 (Del. Ch. , 1999 WL 608850, at *2 (Del. Ch. July 28, 1999)

(internal quotations and citations omitted)). Similar to the strict pleading standards of the Private Securities Litigation Reform Act (“PSLRA”) and federal Rule 9(b), Delaware law also does not

permit the conclusion that a defendant knew of certain facts involving an organization merely

because the defendant had a position of responsibility within that organization.

,

(citin

g

,

1 . , 854 A.2d 121, 147 n.50 (Del. Ch. 2004) 9 9 8 W L 9 1 4 2 6 5 , a t * 4 - 5 )

68

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