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Supreme Court Clarifies Standard for Pleading and Proving Loss Causation in Private Actions for Securities Fraud -- Dura Pharmaceuticals, Inc. v. Broudo |
May 13, 2006
Previously published on April 20, 2005
On April 19, 2005, the Supreme Court announced its much-anticipated decision in Dura
Pharmaceuticals, Inc. v. Broudo, No. 03-932, addressing the pleading and proof burdens that private
plaintiffs must carry on the issue of "loss causation" in actions under section 10(b) of the Securities
Exchange Act of 1934 and S.E.C. Rule 10b-5. Unanimously reversing a decision by the United
States Court of Appeals for the Ninth Circuit, the Dura Court held that plaintiffs seeking damages
under section 10(b) and Rule 10b-5 cannot rely exclusively on the allegation that they purchased
securities at a price artificially inflated by the defendant's false statement.
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The views expressed in this article are solely the views of the author and not Martindale-Hubbell. This article is intended for informational purposes only and is not legal advice or a substitute for consultation with a licensed legal professional in a particular case or circumstance. |
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