Corporations often speak through documents. Some, like press releases, may not identify an author. Others, like 10-Ks, bear the signatures of many who did not write them but sign as required by law. In many cases, groups of individuals, working together, prepare these documents. When such documents contain misstatements, plaintiffs may not know initially who wrote them. To address this difficulty, the U.S. Courts of Appeals for the Ninth and Second Circuits created a judge-made pleading protocol. This protocol permits plaintiffs to name officers, and in some cases directors, as defendants in securities fraud cases without pleading specific facts to show what role each of them played in creating the statements that plaintiffs challenge. The courts created this exception to particularity in fraud pleading before the Supreme Court decided Central Bank and before Congress passed the Private Securities Litigation Reform Act of 1995 (the PSLRA or Act). This Article traces the history of this "group pleading" and considers whether it survives today.
William O. Fisher, Don't Call Me a Securities Law Groupie: The Rise and Possible Demise of the Group Pleading Protocol in 10b-5 Cases, 56 Bus. Law. 991 (2001).