# Scienter

`kaal:entity:scienter`

**Status.** derived

This node is assembled mechanically from the 4 claims that carry the concept tag `scienter`. It is a roster of what the corpus says under this term. It is **not** an adjudicated definition: no single statement here has been ruled canonical, and no first-appearance call has been made. Read the claims and judge for yourself.

## Every claim under this term

4 claims across 2 works, 2013 to 2016.

**2013**

- [kaal-2013-acomparativeperspectiveo-007](https://wulfkaal.github.io/claims/kaal-2013-acomparativeperspectiveo-007) [condition/evidenced] -- Oversight liability in Delaware can be established only on a showing that the directors knew they were not discharging their fiduciary duties or consciously disregarded their responsibilities.
  > However, oversight liability can be established if the plaintiff showed that "the directors knew that they were not discharging their fiduciary [duties] or that the directors demonstrated a conscious disregard for their
  Kaal, A Comparative Perspective on the Limitations of the Duty of Oversight – A Comment on Lisa Fairfax (2013)

**2016**

- [2811718-020](https://wulfkaal.github.io/claims/2811718-020) [failure/evidenced] *(failure mode)* -- Deficient due diligence does not create securities fraud liability unless it is intentional or highly reckless; conduct that is merely negligent or professionally incompetent falls short of the scienter requirement.
  > Courts hold that the lack of due diligence, beyond merely being negligent or just professionally incompetent, must be intentional or highly reckless.
  Wulf A. Kaal, Private Fund Investor Due Diligence – Evidence from 1995 to 2015 (2016). SSRN: https://ssrn.com/abstract=2811718
- [2811718-021](https://wulfkaal.github.io/claims/2811718-021) [failure/evidenced] *(failure mode)* -- Failing to check publicly available documentation on an investment is irresponsible but insufficient to plead fraudulent intent, and failing to perform due diligence commensurate with industry standards is inadequate to plead scienter.
  > While irresponsible, the lack of checking public documentation on an investment is insufficient to plead fraudulent intent,102 and "[failing] to perform due diligence commensurate with industry standards is inadequate to plead scienter.
  Wulf A. Kaal, Private Fund Investor Due Diligence – Evidence from 1995 to 2015 (2016). SSRN: https://ssrn.com/abstract=2811718
- [2811718-029](https://wulfkaal.github.io/claims/2811718-029) [failure/evidenced] *(failure mode)* -- Claims in which investors use hindsight to second guess due diligence practices often fail, even when the manager was clearly incompetent.
  > Claims that involve investors using hindsight to second guess the due diligence practice often fail (even in the face of clearly incompetent management), as seen in South Cherry Street,
  Wulf A. Kaal, Private Fund Investor Due Diligence – Evidence from 1995 to 2015 (2016). SSRN: https://ssrn.com/abstract=2811718

## Verify

Every claim above resolves to a record carrying a verbatim source quote, the sha256 of the source PDF, and a preformatted citation. Nothing here asks to be taken on trust.

    curl -s https://wulfkaal.github.io/entities/scienter.md | sha256sum

**Canonical form.** This markdown file is the canonical hashed representation of this entity node. Its sha256 is the content hash.