• The Supreme Court to Revisit the “Fraud-on-the-Market” Presumption
  • July 2, 2012 | Author: Susan E. Hurd
  • Law Firm: Alston & Bird LLP - Atlanta Office
  • This advisory discusses how, on June 11, 2012, the Supreme Court agreed to hear an appeal that will present the Court with the opportunity to revisit the fraud-on-the-market theory outlined in Basic Inc. v. Levinson. In Connecticut Retirement Plans and Trust Funds v. Amgen Inc., the District Court and the Court of Appeals both held that (1) a class of investors could be certified based on a narrow reading of the requirements for invoking the fraud-on-the-market theory and (2) the issue of whether the presumption of reliance may be rebutted by defendants will not be considered at class certification. Class certification is generally viewed as a critical juncture in the life of a securities case and the inability to obtain class certification often ends the case. With the Amgen appeal, the Supreme Court will be asked to rule on two important issues that could make it harder for securities cases to be certified.