Menu
Fraud on the Market
SEC Investigations and Securities Class Actions: An Empirical Comparison
February 22, 2016
Using actions with both an SEC investigation and a class action as our baseline, we compare the targeting of SEC-only investigations...
February 22, 2016
Using actions with both an SEC investigation and a class action as our baseline, we compare the targeting of SEC-only investigations...
Supreme Court Reaffirms Fraud-on-the-Market Theory of Reliance
October 28, 2014
After agreeing to revisit its landmark ruling in Basic, Inc. v. Levinson,the U.S. Supreme Court has substantially reaffirmed the decision, which affords plaintiffs in federal securities litigation a rebuttable presumption of reliance when they can establish an open, developed, and efficient market for the stock in question. Halliburton Co. v. Erica P. John Fund, Inc. The Court rejected arguments that its intervening decisions as well as empirical evidence had undermined Basic. Even so, it held that...
October 28, 2014
After agreeing to revisit its landmark ruling in Basic, Inc. v. Levinson,the U.S. Supreme Court has substantially reaffirmed the decision, which affords plaintiffs in federal securities litigation a rebuttable presumption of reliance when they can establish an open, developed, and efficient market for the stock in question. Halliburton Co. v. Erica P. John Fund, Inc. The Court rejected arguments that its intervening decisions as well as empirical evidence had undermined Basic. Even so, it held that...
Supreme Court Takes Middle Road in Halliburton Decision
October 10, 2014
On June 23, 2014, the Supreme Court of the United States released its long-awaited decision in Halliburton v. Erica P. John Fund, Inc., __ U.S. __. 2014 WL 2807181 (Jun. 23, 2014), a Rule 10b-5 putative securities class action. Instead of abrogating or fully embracing the fraud-on-the market presumption established in the 1988 Basic v. Levinson decision, Chief Justice John Roberts, in an opinion joined by Justices Anthony Kennedy, Ruth Ginsburg, Stephen Breyer, Sonia Sotomayor, and Elena Kagan took...
October 10, 2014
On June 23, 2014, the Supreme Court of the United States released its long-awaited decision in Halliburton v. Erica P. John Fund, Inc., __ U.S. __. 2014 WL 2807181 (Jun. 23, 2014), a Rule 10b-5 putative securities class action. Instead of abrogating or fully embracing the fraud-on-the market presumption established in the 1988 Basic v. Levinson decision, Chief Justice John Roberts, in an opinion joined by Justices Anthony Kennedy, Ruth Ginsburg, Stephen Breyer, Sonia Sotomayor, and Elena Kagan took...
IPO-Related Securities Litigation Picks Up
October 6, 2014
In several posts of the last several months (most recently here), I have commented that with the increased number of IPOs, an increase in IPO-related securities litigation would likely follow. If the securities litigation filing activity over the last couple of weeks is any indication, the anticipated increase in IPO-related securities litigation has arrived. Interestingly, most of the recent activity involves companies that completed their IPOs in 2013, suggesting that IPO-related securities litigation...
October 6, 2014
In several posts of the last several months (most recently here), I have commented that with the increased number of IPOs, an increase in IPO-related securities litigation would likely follow. If the securities litigation filing activity over the last couple of weeks is any indication, the anticipated increase in IPO-related securities litigation has arrived. Interestingly, most of the recent activity involves companies that completed their IPOs in 2013, suggesting that IPO-related securities litigation...
What Businesses Need to Know About the Roberts Court
July 21, 2014
If you’ve thought about filing a business lawsuit in federal court or you have one underway already, you’ll probably want to read about two still-in-process studies by Columbia University and Harvard University law school professors on how the U.S. Supreme Court under Chief Justice John Roberts (2005-present) has treated business lawsuits, and how that treatment has resulted in a more arduous, expensive process for businesses. On April 4, draft papers on the topic by Columbia’s Scott Hemphill...
July 21, 2014
If you’ve thought about filing a business lawsuit in federal court or you have one underway already, you’ll probably want to read about two still-in-process studies by Columbia University and Harvard University law school professors on how the U.S. Supreme Court under Chief Justice John Roberts (2005-present) has treated business lawsuits, and how that treatment has resulted in a more arduous, expensive process for businesses. On April 4, draft papers on the topic by Columbia’s Scott Hemphill...
Analyzing Financial Fraud Cases Using a Linguistics-Based Text Mining Approach
May 27, 2014
The paper proposes a linguistics-based text mining approach to automate the process of extracting financial concepts from...
May 27, 2014
The paper proposes a linguistics-based text mining approach to automate the process of extracting financial concepts from...
Report Shows ‘Real Costs’ of Securities Class Actions
March 18, 2014
Investors each year have lost an average of $39 billion from securities class action lawsuits to collect only about $5 billion in settlements per year since the enactment of the Private Securities Litigation Reform Act in 1995, according to a U.S. Chamber Institute for Legal Reform (ILR) study released Friday. During the past 18 years, the suits cost shareholders at least $701 billion, while they only recovered about $90 billion, says "Economic Consequences: The Real Costs of U.S. Securities...
March 18, 2014
Investors each year have lost an average of $39 billion from securities class action lawsuits to collect only about $5 billion in settlements per year since the enactment of the Private Securities Litigation Reform Act in 1995, according to a U.S. Chamber Institute for Legal Reform (ILR) study released Friday. During the past 18 years, the suits cost shareholders at least $701 billion, while they only recovered about $90 billion, says "Economic Consequences: The Real Costs of U.S. Securities...
Federal Securities Class Action Filings Grew 10% in 2013
March 10, 2014
Two recent reports, one by NERA Economic Consulting, and the other by Cornerstone Research, indicate that the number of securities class actions filed by plaintiffs in the federal courts grew by approximately 9-10% in 2013 as compared with 2012. The two reports use different classification schemes, and consequently list different total numbers of filings (234 according to NERA, 166 according to Cornerstone), but they both agree that filings have risen significantly over the previous year. ...
March 10, 2014
Two recent reports, one by NERA Economic Consulting, and the other by Cornerstone Research, indicate that the number of securities class actions filed by plaintiffs in the federal courts grew by approximately 9-10% in 2013 as compared with 2012. The two reports use different classification schemes, and consequently list different total numbers of filings (234 according to NERA, 166 according to Cornerstone), but they both agree that filings have risen significantly over the previous year. ...
Rethinking Basic [Fraud on the Market]
January 8, 2014
Next spring, in the Halliburton case, the United States Supreme Court is expected to reconsider the Basic ruling that, twenty-five years ago, adopted the fraud-on-the-market theory and has since facilitated securities class action litigation. In this paper we seek to contribute to the expected reconsideration. We show that, in contrast to claims made by the parties, the Justices need not assess the validity or scientific standing of the efficient market hypothesis; they need not, as it were, decide...
January 8, 2014
Next spring, in the Halliburton case, the United States Supreme Court is expected to reconsider the Basic ruling that, twenty-five years ago, adopted the fraud-on-the-market theory and has since facilitated securities class action litigation. In this paper we seek to contribute to the expected reconsideration. We show that, in contrast to claims made by the parties, the Justices need not assess the validity or scientific standing of the efficient market hypothesis; they need not, as it were, decide...
