Tellabs, Inc. v. Makor Issues & Rights, Ltd.

Tellabs, Inc. (defendant), a fiber-optic equipment maker led by CEO Richard Notebaert (defendant), issued increasingly optimistic -- and in some instances allegedly false -- statements about its growth prospects and financial condition between late 2000 and mid-2001, allegedly inducing investors to buy Tellabs stock before its true financial condition became public. Shareholders (plaintiff) filed a securities-fraud class action under SEC Rule 10b-5; the district court twice dismissed the complaint for failing the PSLRA's heightened pleading standard requiring a "strong inference" of scienter, the second time with prejudice, but the Seventh Circuit reversed, and Tellabs and Notebaert sought Supreme Court review.