Judgment Day for Fraud-on-the-Market: Reflections on Amgen and the Second Coming of Halliburton

Abstract

Through two recent decisions, the Supreme Court has both reaffirmed and revised the so-called fraud-on-the-market presumption of reliance—the mechanism that allows securities-fraud class actions to go forward. Members of the Court split on the mechanics of the presumption in the first of these cases (Amgen), leading to a call to reconsider the entire presumption as outmoded and mistaken. The second case (Halliburton) said that the presumption was still good law, though it did potentially increase the difficulty of getting the class certified. This Article compares and contrasts the two cases, explores the role of market efficiency post-Halliburton, and digs into what it means for the issue of price distortion to be an appropriate subject for consideration at the class certification stage.

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57 Ariz. L. Rev. 37 (2015)

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Authors

Donald C. Langevoort (Georgetown University)

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