Despite the urgent plea of business advocates, the U.S. Supreme Court on Wednesday appeared reluctant to completely overturn a key precedent that has made it easier for plaintiffs to sue companies for securities fraud.
Instead, during arguments in Halliburton v. Erica P. John Fund, several justices latched onto what they labeled “the law professors’ brief” filed in the case as a possible “midway position,” in the words of Justice Anthony Kennedy. The brief, authored by John Elwood of Vinson & Elkins, suggests that plaintiffs be required to conduct an “event study” at the class-certification stage showing that a company’s misstatements had a significant impact on share prices.
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