Opinion ID: 4182911
Heading Depth: 3
Heading Rank: 1

Heading: The Scienter Requirement

Text: To prove a violation of section 206(1) of the Adviser’s Act, the SEC must show the adviser acted with scienter. Steadman I, 603 F.2d at 1134. Scienter is “a mental state embracing intent to deceive, manipulate, or defraud.” Matrixx Initiatives, Inc. v. Siracusano, 563 U.S. 27, 48, 131 S. Ct. 1309, 1323 (2011) (quotation omitted). “Scienter may be established by a showing of knowing misconduct or severe recklessness.” SEC v. Monterosso, 756 F.3d 1326, 1335 (11th Cir. 2014) (per curiam) (quotation omitted). Scienter can be established through direct or circumstantial evidence. Id. The scienter of a corporation is established by showing that the corporation’s officers or directors acted with scienter. See Thompson v. RelationServe Media, Inc., 610 F.3d 628, 635 (11th Cir. 2010) (“Corporations have no state of mind of their own; rather, the scienter of their agents must be imputed to them.”). 20 Case: 16-15322 Date Filed: 06/30/2017 Page: 21 of 32