Supreme Keeps Life in Securities Fraud Class Action

The U.S. Supreme Court has kept alive the main legal theory behind securities fraud class actions: that plaintiffs can rely upon the assumption that stock prices in efficient markets reflect all publicly available information and misstatements about a company's financial situation is a fraud on the market.

But the Supreme Court has increased the ability of defendants to rebut the presumptions that plaintiffs rely upon to allege that they were defrauded by company misstatements, the Legal Times' Tony Mauro reports. Now defendants will be able to rebut, before class certifications, that misstatements impacted stock prices.