On September 22nd, the Sixth Circuit affirmed the dismissal of a securities fraud action for failing to adequately plead scienter. Plaintiffs alleged that the defendant-auditor knowingly or recklessly ignored the issuer's financial misstatements in order to increase its audit fees. The Court held that conclusory allegations about what defendant must or should have known do not amount to specific allegations showing material misstatements or omissions committed with recklessness. La. School Employees' Ret. Sys. v. Ernst & Young LLP.