In order to regulate the issuing and trading market of the securities, the U.S. government promulgated Securities Act of 1933 and Securities Exchange Act of 1934. The most important statutes in preventing the illegal act in securities market are Section 1 O(b) of Securities Exchange Act of 1934 and Rule 10b-5, the so-called “securities fraud provision.” The intent requirement of securities fraud was contentious. In order to resolve this issue, Federal Supreme Court in Hochfelder declared that this intent requirement is limited to scienter, not including negligence. As for the issue: Can recklessness also constitute the scienter? The famous note 12 said this issue was “left open.” At that time, most courts recognized recklessness, it almost became a well-established judicial interpretation. But after the promulgation of Private Securities Litigation Reform Act of 1995, recklessness and its test became issues again. Securities Litigation Uniform Standards Act was intended to repair this issue, subsequently published in 1998. But when this Act came into force, this issue was getting bitter. Finally, brought in “circuit split.”