Scienter

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Scienter is a legal term that refers to knowledge of wrongdoing. This means that an offending party has knowledge of the "wrongness" of an act or event prior to committing it. For example, if a man sells a car with brakes that don't work to his friend, and he doesn't know about the problem, then the man has no scienter. If he sells the car and knew of the problem before he sold, he has scienter.

1 The Scienter Action
2 General Use
3 Scienter as Element of Securities Fraud Claim
4 See also
5 External links
6 References

[edit] The Scienter Action

The scienter action is a category within tort law in some common law jurisdictions which deals with the damage done by an animal directly to a human. It has a long history in English law. An action in those jurisdictions, where it has not been extinguished by statute, is in addition to the torts of negligence and nuisance. Where an animal is known to behave in a certain way, and that is expressed on a person causing injury, an action can be taken in this tort. This tort is not available in New South Wales, The Australian Capital Territory, South Australia or New Zealand. In these jurisdictions the actions involving animals need to be in nuisance or negligence. To be successful the plaintiff needs to take action against the person in control of the animal, and it is strict liability, requiring no more than proof of injury, that the animal had a problematic trait, and the person in control knew about the trait in the animal. Being strict liability, there is no need to argue fault in the form of wilful intent or negligence on the part of the animal or its controller. The only defence is if it can be proved the plaintiff voluntarily assumed the risk of injury by their actions, or if the plaintiff was the cause of the injury. It is common to distinguish between harmless animals and wild animals. No scienter is needed for wild animals. Animals are classed as wild or harmless on the basis of species or kind, not on the basis of being a tame individual. An elephant is considered wild irrespective of its use. The scienter action is referred to in Rylands v. Fletcher in that one who keeps a wild thing “must keep it at his peril” to make reference to part of Justice Colin Blackburn’s comment.

[edit] General Use

It is generally used as an element to certain causes of action and is sometimes used as a standard for liability or guilt in some jurisdictions. For instance, section 1960 of title 18 of the United States Code, which prohibits unlicensed money transmitting businesses, has a scienter requirement, in that it only applies to anyone "[who] knowingly conducts, controls, manages, supervises, directs, or owns all or part of an unlicensed money transmitting business". ^[1]

[edit] Scienter as Element of Securities Fraud Claim

In order to prevail in a securities fraud claim under Section 10(b) of the Securities Exchange Act of 1934, a plaintiff must allege and prove that the defendant acted with scienter. The Private Securities Litigation Reform Act of 1995 added the requirement that a plaintiff must plead facts giving rise to a "strong inference" of scienter. The meaning of scienter under this law has been highly controversial since the enactment of the PSLRA. In 2007, the United States Supreme Court will issue a decision clarifying the meaning of this legal term.