Document Type

Supreme Court Commentaries

Publication Date

6-17-2014

Keywords

General

Subject Category

Constitutional Law | Law

Abstract

This commentary previews the upcoming Supreme Court case Erica P. John Fund, Inc. v. Halliburton Co. in which the Court is called upon to reexamine the controversial fraud-on-the-market rule. This rule, a cornerstone of securities litigation for the past two decades, allows the court to presume that securities fraud plaintiffs relied on a misstatement or omission if the security affected is traded on an efficient market. The subject of intense debate for years, this commentary reviews and analyzes precedent and predicts the case's likely outcome--that the Court will not expressly overrule the fraud-on-the-market rule, but will nevertheless modify it to place more of an evidentiary burden on securities fraud plaintiffs.

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