Abstract
Motions to dismiss are the litmus test in securities fraud class actions. A motion to dismiss is filed in virtually every securities fraud class action, and motions to dismiss are extraordinarily successful in securities fraud class actions. Therefore, courts' opinions on motions to dismiss are immensely important to the evolution of the substantive and procedural law of securities fraud.In this Essay, I discuss emerging issues in courts' rulings on motions to dismiss securities fraud class actions. In order to ensure that my comments reflect current trends in this ever-evolving area, I have analyzed a data set of 80 opinions issued in 2013 on motions to dismiss securities fraud class actions and drawn the following eight observations therefrom: A. Winnowing Is Real But Relatively Rare; B. Dicta Abounds, and That's A Good Thing; C. Scienter Is (Still) King; D. The Falsity-Scienter Inference Continues to Percolate; E. The Core Operations Inference Is Hot; F. Subjective Falsity Matters; G. Puffery Is Untethered; H. What Rule 11 Findings Mandate?I hope that this journey around the world of securities fraud in 80 motions to dismiss provides guidance to litigants, courts, and scholars on this ever-evolving area of law. This Essay is drawn from my remarks at the 2013 Annual Institute for Investor Protection Conference: "Effective and Ethical Pre-Filing Strategies for Investigating and Pleading Securities Fraud Claims,” sponsored by Loyola University Chicago School of Law's Institute for Investor Protection and Institute for Law and Economic Policy.The Data Set Appendix for this paper is available at the following URL: "http://ssrn.com/abstract=2373808" http://ssrn.com/abstract=2373808