2014 Mid-Year Securities Litigation Update

The Harvard Law School Forum on Corporate Governance and Financial Regulation 2014-08-04


Editor's Note: The following post comes to us from Jonathan C. Dickey, partner and Co-Chair of the National Securities Litigation Practice Group at Gibson, Dunn & Crutcher LLP, and is based on a Gibson Dunn publication.

It almost goes without saying that the first half of 2014 brought with it the most significant development in securities litigation in decades: the U.S. Supreme Court decided Halliburton Co. v. Erica P. John Fund, Inc.—Halliburton II. In Halliburton II, the Court declined to revisit its earlier decision in Basic v. Levinson, Inc.; plaintiffs may therefore continue to avail themselves of the legal presumption of reliance, a presumption necessary for many class action plaintiffs to achieve class certification. But the Court also reiterated what it said 20 years ago in Basic: the presumption of reliance is rebuttable. And the Court clarified that defendants may now rebut the presumption at the class certification stage with evidence that the alleged misrepresentation did not affect the security's price, making "price impact" evidence essential to class certification.

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Kobi Kastiel, Co-editor, HLS Forum on Corporate Governance and Financial Regulation,

Date tagged:

08/04/2014, 16:30

Date published:

08/04/2014, 09:22