This practice note provides guidance for defending against scienter-based claims in securities fraud class actions brought by private plaintiffs under Section 10(b) (15 U.S.C. § 78j) of the Securities Exchange Act of 1934, as amended (Exchange Act), and Rule 10b-5 (17 C.F.R. § 240.10b-5) (collectively, Section 10(b)). Public companies are frequent targets of Section 10(b) lawsuits when the company's stock price drops following the disclosure of a negative event. Plaintiffs often seek to turn such circumstances into securities fraud class actions, alleging that a company acted with scienter (i.e., an intent to defraud investors) when making earlier public statements about the subject of the disclosed event. However, the Private Securities Litigation Reform Act of 1995 (PSLRA), 104 P.L. 67, requires that a plaintiff plead a strong inference of scienter and provides an important tool for defendants to seek early dismissal of securities fraud claims. This note discusses the requirements ...