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

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.

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