The Halliburton case has the potential to have far reaching consequences for securities lawsuits. If the Court overturns the fraud-on-the-market presumption, class certification would be exceedingly difficult for securities plaintiffs. As a result, individual plaintiffs without large, provable damages would likely have to resort to other theories of liability.9 Such a decision would also result in case management issues for defendants. For example, defendants would have to worry about seriatim lawsuits (instead of just opt-out lawsuits) until the end of the limitations period.
If, on the other hand, the Court does not overturn the fraud-on-the-market presumption but allows defendants to rebut it, class certification litigation will become more complex; defendants will have a new tool to defeat securities classes and plaintiffs will have a new hurdle to moving forward. Regardless, the Court's decision should make next year a very interesting one for the securities bar.
See also:
Not so Basic anymore – USA Supreme Court to assess Basic's fraud-on-the-market presumption of relianceThe Basic presumption: securities class actions: Basic, Inc. v. Levinson, 485 U.S. 224 (1988)
The Court's grant of certiorari: Halliburton Co. v. Erica P. John Fund, Inc., No. 13-317
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