Janas

Opinion by Judge SNEED; Concurrence and Dissent by Judge BROWNING.

This case requires us to interpret the Private Securities Litigation Reform Act of 1995 (“PSLRA”). 2 Congress enacted the PSLRA to deter opportunistic private plaintiffs from filing abusive securities fraud claims, in part, by raising the pleading standards for private securities fraud plaintiffs. See, e.g., H.R. Rep. Conf. No. 104-369, at .32-41 (1995); see also 15 U.S.C. § 78u-4(b)(l), (2) (1997). In doing so, Congress generated a flood of litigation and commentary regarding the proper interpretation of these standards. Much of this litigation deals specifically with the pleading issue now before us, i.e., what must a plaintiff allege in order to satisfy the requirement that he state facts giving rise to a “strong inference” of the required state of mind? See 15 U.S.C. § 78u-4(b)(2) (requiring that the complaint “state with particularity facts giving rise to a strong inference that the defendant acted with the required state of mind”).

Due to the nature of this litigation, we shall depart somewhat from the customary form of opinions of this Court by discussing generally what we hold to be the pleading standard…

concurring in part and dissenting in part:

I respectfully dissent from the majority's holding that (1) the Private Securities Litigation Reform Act (the "Reform Act") eliminated recklessness and motive and opportunity to commit fraud as based for establishing scienter under § 10(b) and Rule lOb-5, and (2) the allegations of scienter in Brody's complaint were insufficient to survive a motion to dismiss. 1 Congress plainly intended the Reform Act to raise the pleading standard by requiring plaintiffs to allege facts raising a "strong inference" of scienter, rather than permitting plaintiffs (as this circuit did) to plead scienter "simply by saying that scienter existed," In re GlenFed, Inc. Sec. Litig., 42 F.3d 1541, 1547 (9th Cir.1994) (en banc), but did not intend to restrict the evidentia-ry bases from which the inference of scien-ter might be drawn. By holding to the contrary, the majority raises the pleading bar higher than that envisioned by Congress, and places the Ninth Circuit at odds with both the Second and Third Circuits.

I.

The Reform Act

The Reform Act requires plaintiff~ to "state with particularity facts giving rise to a strong inference" of scienter. 15 U.S.C. §…