The Locus of Corporate Scienter

86 Pages Posted: 22 Apr 2009 Last revised: 2 Mar 2010

See all articles by Patricia Sánchez Abril

Patricia Sánchez Abril

University of Miami - Department of Business Law

Ann Morales Olazábal

University of Miami - Department of Business Law

Date Written: 2006

Abstract

With no uniform jurisprudential roadmap, courts in civil securities fraud lawsuits have been applying widely divergent assumptions and methods for locating a defendant corporation’s scienter. This article posits a new conceptualization of corporate scienter in the 10(b) setting, built upon the history, philosophical foundations, and evolution of corporate states of mind in the area of criminal law, a context that has necessarily seen various approaches to corporate scienter develop and flourish. Based on this new construct, the article proposes a rule that places in the locus of scienter a group of corporate agents whose personal scienter, by virtue of their participation in or link to the 10(b) misrepresentation or omission, is indicative of the corporation’s. More importantly, the proposed rule recognizes the influence of corporate personality in the perpetration of wrongdoing and presumes that a corporation can be found to possess scienter of its own – temporally and physically independent from that of its constituent agents.

Suggested Citation

Abril, Patricia and Olazábal, Ann Morales, The Locus of Corporate Scienter (2006). Columbia Business Law Review, Vol. 1, 2006, Available at SSRN: https://ssrn.com/abstract=1392238

Patricia Abril (Contact Author)

University of Miami - Department of Business Law ( email )

United States

Ann Morales Olazábal

University of Miami - Department of Business Law ( email )

5250 University Drive, Jenkins 323E
or P.O. Box 248022
Coral Gables, FL 33146
United States
305 284 4508 (Phone)
305 284 3762 (Fax)

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