Loss causation is the final component of the axiomatic six point test for alleging federal securities fraud. Ironically, and probably as a consequence of it being last in the sequence, this vital element of proof is often outshined by its peers, which typically garner far more attention. See, e.g., Goldman Sachs Group v. Arkansas Teacher Retirement System, ___ U.S. ____ (No. 20-222) (argued March 29, 2021) (anticipating a new Supreme Court landmark on reliance and the fraud on the market theory).

But the recent case of Irving Firemen's Relief & Retirement Fund v. Uber Technologies, ___ F.3d ___ (No. 19-16667) (9th Cir. May 19, 2021), may place loss causation on a more equal footing with its siblings. In affirming dismissal of the complaint there, the U.S. Court of Appeals for the Ninth Circuit underscored the absolute necessity of succinctly linking revelations of alleged misstatements or omissions to a loss in market value. Before proceeding to our analysis, however, a brief review of the basic tenets of pleading securities fraud is in order.

The Six Elements of Securities Fraud

As recently exposited in this space (see Sabino, "In re Tesla, Tweets, and Securities Fraud," 264 New York Law Journal, p.4, cl.4 (Oct. 9, 2020)), §10 of the 1934 Securities Exchange Act, and Rule 10b-5 as promulgated thereunder, prohibit all manner of fraud and deceit in connection with the purchase or sale of securities. 15 U.S.C. §78j(b) and 17 C.F.R. §240.10b-5, respectively. See also Lorenzo v. S.E.C., 587 U.S. ___ (2019).