If the U.S. Supreme Court decides to curb securities fraud litigation, it's widely expected that they'll use the arguments advanced by law school professors Joseph Grundfest or Adam Pritchard, Reuters' Alison Frankel reports. Both filed competing amicus briefs in Halliburton Co. v. Erica P. John Fund.
The case is challenging the theory that share prices reflect all publicly available information and that there is a fraud on the market when corporations misrepresent the truth publicly, Frankel writes. Grundfest argued that investors can't recover money damages at all without showing they relied on misstatements, while Pritchard suggests that investors "should be required to show that corporate misrepresentations distorted share prices by offering evidence of a market correction when the truth was revealed," Frankel reports.
During oral argument, Justice Anthony Kennedy cited Pritchard's position, Frankel said.
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