The U.S. Court of Appeals for the Sixth Circuit has pared back its precedent allowing the knowledge of a corporate officer to be imputed to a corporation in a securities fraud case even if that officer did not issue statements that were false or misleading to investors.

As a result, the Sixth Circuit has joined the middle way on a circuit split on whether plaintiffs—who must prove a defendant had the mindset to commit securities fraud—can attribute that mindset to a corporation on a collective basis.

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