Scienter
Knowing of wrongdoing
“Scienter” is a legal term used to describe a mental state or knowledge of a certain fact or circumstance. The term is primarily used in the context of securities law and refers to the knowledge or intent of a person involved in a fraudulent activity.
In the context of securities law, scienter is a crucial element in proving securities fraud. To establish scienter, the plaintiff must demonstrate that the defendant knew of or recklessly disregarded a material fact, which resulted in the plaintiff’s harm.
Thus, scienter is an essential element in securities litigation, as it separates legitimate business practices from fraudulent activity. It is important to note that scienter can only be established by a preponderance of the evidence, and not by mere suspicion or speculation.
In summary, scienter refers to the intent or knowledge of a person involved in a fraudulent activity, and it is an essential element in proving securities fraud.
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