what is scienter?

Scienter refers to a person's state of mind while they are engaged in a certain activity

​Scienter is a legal term that refers to a person's state of mind or knowledge when engaging in certain actions. The term is commonly used in the context of securities law and fraud cases. In legal terms, scienter refers to the defendant's knowledge or intention to commit a wrongful act, particularly in cases involving fraud or misconduct. It is an important element that needs to be proven to establish liability in many legal cases.

In the context of securities law, scienter plays a crucial role in determining whether a person or entity has violated securities regulations. Under the Securities Exchange Act of 1934, for example, it is unlawful for any person to engage in fraudulent activities or practices in connection with the purchase or sale of securities. To establish liability under this statute, the plaintiff must demonstrate that the defendant acted with scienter, meaning that they knew of the falsity or misleading nature of their statements or omissions.

Scienter can be proven through various means, including direct evidence or circumstantial evidence. Direct evidence of scienter may include emails, documents, or other forms of communication that clearly show the defendant's knowledge and intention to deceive. Circumstantial evidence, on the other hand, relies on inference and deduction to establish scienter. This may involve analyzing the defendant's conduct, patterns of behavior, or financial motives to determine whether they had the necessary knowledge and intent to commit fraud.

In addition to securities law, scienter is also relevant in other areas of law, such as tort law and criminal law. In tort law, for example, a person may be held liable for fraud if they made false statements with knowledge of their falsity and with the intent to deceive another person. Similarly, in criminal law, scienter is an important element in certain crimes such as embezzlement or insider trading. In these cases, the prosecution must prove that the defendant had knowledge of their illegal actions and intended to commit them.

Overall, scienter is a crucial concept in various areas of law, particularly in cases involving fraud or misconduct. It refers to a person's state of mind or knowledge when engaging in certain actions and plays a significant role in determining liability. Whether it is in securities law, tort law, or criminal law, proving scienter is essential for establishing wrongdoing and seeking legal remedies.

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The Law Offices of Timothy L. Miles
Tapestry at Brentwood Town Center
​300 Centerview Dr., #247
Brentwood, TN 37027
Phone: (855) 846–6529
​Email: [email protected]

timothy l. miles, esq.

Nashville attorney Timothy L. Miles is a nationally recognized shareholder rights attorney raised in Nashville, Tennessee. Mr. Miles has dedicated his career to representing shareholders, employees, and consumers in complex class-action litigation. Whether serving as lead, co-lead, or liaison counsel, Mr. Miles has helped recover hundreds of millions of dollars for defrauded investors,  shaped precedent-setting decisions, and delivered real corporate governance reforms. Judges and peers have repeatedly recognized Mr. Miles’ relentless advocacy for the underdog, as well as his unbendable ethical standards. Mr. Miles was recently selected by Martindale-Hubbell® and ALM as a 2026 Top Ranked Lawyer, 2022 Top Rated Litigator. and a 2022 Elite Lawyer of the South. Mr. Miles also maintains the AV Preeminent Rating by Martindale-Hubbell®, their highest rating for both legal ability and ethics. Mr. Miles is a member of the prestigious Top 100 Civil Plaintiff Trial Lawyers: The National Trial Lawyers Association,​Class Action:  Class Action: Top National Trial Lawyers, National Trial Lawyers Association (2023), a superb rated attorney by Avvo, a recipient of the Lifetime Achievement Award by Premier Lawyers of America (2019) and recognized as a Distinguished Lawyer, Recognizing Excellence in Securities Law, by Lawyers of Distinction (2019); a Top Rated Litigator by Martindale-Hubbell® and ALM  (2019-2022); America’s Most Honored Lawyers 2020 – Top 1% by America’s Most Honored (2020-2022).  Mr. Miles has published over a thousand on various issues of the law, including class actions, whistleblower cases, products liability, civil procedure, derivative actions, corporate takeover litigation, corporate formation, mass torts, dangerous drugs, and more.  Please visit our website or call for free anytime.

CONTACT                                                      
The Law Offices of Timothy L. Miles
Tapestry at Brentwood Town Center
​300 Centerview Dr., #247
Brentwood, TN 37027
​​Phone: (855) 846-6529
​Email: [email protected]