U.S. Supreme Court,
Securities
Jan. 7, 2021
High court to again address class cert in securities fraud cases
This term, the U.S. Supreme Court has another chance to address class certification in securities fraud class actions.
James J. Beha
Partner
Morrison & Foerster LLP
Judson E. Lobdell
Partner
Morrison & Foerster LLP
Reliance on an alleged misrepresentation when entering into a securities transaction is an essential element of a federal securities fraud claim. As a result, securities fraud lawsuits cannot be certified as class actions unless the plaintiffs can show that the reliance element can be proven on a class-wide basis. To do so, plaintiffs generally seek to invoke the "fraud-on-the-market" presumption of class-wide reliance recognized in Basic Inc. v...
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