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Supreme Court reaffirms “fraud-on-the-market” presumption in securities fraud class actions

Veronica Rendon (Partner based at Arnold & Porter LLP, New York, New York, USA)
John Freedman (Partner based at Arnold & Porter LLP, Washington, DC, USA)
Adam Reinhardt (Associate based at Arnold & Porter LLP, Washington, DC, USA)

Journal of Investment Compliance

ISSN: 1528-5812

Article publication date: 28 October 2014

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Abstract

Purpose

To explain the Supreme Court’s recent decision in Halliburton Co. v. Erica P. John Fund, Inc. and its implications for private class action litigation under the federal securities laws.

Design/methodology/approach

Explains the background on the Halliburton decision, including the prior case history and key precedents, analyzes the key reasoning and holdings of the decision, and discusses the implications of the decision and how it will impact private class actions brought under the securities laws.

Findings

While there was considerable pontification in the bar that the Halliburton case might provide a vehicle to curtail many class actions brought under the securities laws, the Halliburton decision left prior law and practice largely intact, but provides defendants in such cases a tool to challenge viability of lawsuits in certain circumstances.

Originality/value

Practical guidance from experienced securities litigators.

Keywords

Acknowledgements

© 2014 Arnold & Porter LLP

Disclaimer. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.

Citation

Rendon, V., Freedman, J. and Reinhardt, A. (2014), "Supreme Court reaffirms “fraud-on-the-market” presumption in securities fraud class actions", Journal of Investment Compliance, Vol. 15 No. 4, pp. 37-40. https://doi.org/10.1108/JOIC-09-2014-0041

Publisher

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Emerald Group Publishing Limited

Copyright © 2014, Authors