The State of Securities Class Actions
The Supreme Court is preparing to hear a far-reaching securities case that will determine the future of the “fraud on the market” theory, the Wall Street Journal reports:
In essence, the doctrine lets aggrieved investors join forces in court without ever having to show a direct connection between each shareholder’s losses and the alleged fraud. Instead, the courts generally assume that shareholders suffer harm whenever they buy stock in a company that is cooking its books.
The fraud-on-the-market theory led to a surge in securities lawsuits after a divided Supreme Court enshrined it in 1988.
The case, Halliburton v. Erica P. John Fund, is scheduled to go before the court on Wednesday.
In the run-up to the case, ILR is hosting a symposium on Friday, February 28 to debate the costs and benefits of securities class action litigation. The symposium kicks off with a keynote address from former SEC Commissioner Troy Paredes, followed by panel discussions on the past, present, and future of securities class actions.
Visit www.regonline.com/ClassAction to register.
