7th Circ. Provides Guidance on Deciding Motions for Class Certification in Securities Litigation
Standing alone, the Halliburton II decision offers a deceivingly simple rule for lower courts to apply when deciding whether to certify a class where the plaintiffs invoke, and the defendants attempt to rebut, the fraud-on-the-market theory.
September 01, 2020 at 11:09 AM
11 minute read
Federal courts have been struggling with deciding motions for class certification as there have been a number of recent rulings by the U.S. Supreme Court and certain of the courts of appeals that answer certain questions while creating others. In Halliburton II, the Supreme Court held that a defendant in a securities class action may rebut the Basic presumption of reliance at the class certification stage by producing direct evidence that a misrepresentation did not affect stock prices. After all, the Supreme Court reasoned, "in the absence of price impact, Basic's fraud-on-the-market theory and presumption of reliance collapse." See Halliburton v. Erica P. John Fund, 573 U.S. 258, 278 (2014). Standing alone, the Halliburton II decision offers a deceivingly simple rule for lower courts to apply when deciding whether to certify a class where the plaintiffs invoke, and the defendants attempt to rebut, the fraud-on-the-market theory.
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