US Supreme Court provides new avenue for defendants to challenge securities class certification

The US Supreme Court has issued a unanimous decision reaffirming the “fraud-on-the-market” doctrine that has been a cornerstone of modern securities class action litigation for the past 25 years: Halliburton v. Erica P. John Fund, Inc. The doctrine introduces a presumption of reliance for securities fraud claims, so that individual plaintiffs do not have to prove that they relied on the alleged misrepresentation or omission. In Halliburton, however, the Court held that defendants may defeat the presumption at the class certification stage through proof that any alleged misrepresentation did not impact the price of the relevant securities, a holding that will provide significant benefit to defendants in securities cases.  To read our New York e-bulletin on the decision, click here.