Fraud-on-the-Market

February 25, 2014
U.S. Bankruptcy Courthouse
New York, NY

Organizer: Federal Bar Council

Topic:  On March 5, 2014, the Supreme Court will hear argument in Halliburton Co. v. Erica P. John Fund, Inc., squarely addressing the continued viability of the fraud-on-the-market presumption, enunciated in the landmark decision of Basic v. Levinson, 485 U.S. 224 (1988). That rebuttable presumption, based upon the efficient market theory, presumes that all material information is absorbed by an efficient market, and allows plaintiffs to establish reliance on a class-wide basis in securities fraud actions. The Court’s decision has the potential to overrule or modify Basic.

Recently, in Amgen v. Connecticut Retirement Plans, 133 S. Ct. 1184 (2013), the dissent questioned the fraud-on-the-market theory in a case where the Court held that the plaintiffs need not prove materiality at the class certification stage.

This program will focus on the historical application and validity of that theory since Basic, as well as the anticipated arguments to be presented in Halliburton.