United States:
Justices Should Clarify Securities Fraud Loss Causation
04 May 2021
Shearman & Sterling LLP
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It has been over 15 years since the U.S. Supreme Court addressed
the pleading of loss causation in securities fraud cases.
In its 2005 decision in Dura Pharmaceuticals Inc. v. Broudo,
however, the court merely held that plaintiffs must plead and prove
a causal connection between any alleged misrepresentations and the
subsequent decline in the company's stock price.[1] It did not
address exactly how courts are supposed to assess if loss causation
has been adequately plead.
At a time when many securities class actions are based on
external events that have led to a stock price drop — rather
than internal...
Read "Justices
Should Clarify Securities Fraud Loss Causation."
Originally published by law360
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