Pending SCOTUS ruling could change the face of securities litigation

Brings into question the validity of the ‘fraud on the market’ concept

The “fraud on the market” presumption has historically been a cornerstone of securities litigation and has undoubtedly led to a higher number of cases since its institution in the late 80s. The provision makes it easier for investors to recoup money from corporations that release statements that are misleading or false, and has always been a contentious point in securities cases.

Now the Supreme Court is taking another look at the theory, and the results could make it more difficult to certify class actions against corporations that make misleading statements. The debate is being rekindled by a case involving Halliburton Corp. that was revived on Nov 15.

Executive Editor

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Chris DiMarco

Chris DiMarco, Executive Editor of InsideCounsel magazine, has a background in multimedia production with previous involvement in projects in which he developed and created content...

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