Halliburton II and Fraud-on-the-Market Theory: New Legal Challenges and Strategies Impacting Class Certification
Presented by The Knowledge Group
Courts across the country have begun applying the U.S. Supreme Court’s decision in Halliburton Co. v. Erica P. John Fund Inc. (Halliburton II), which affirmed defendants’ right to seek to rebut the fraud-on-the-market presumption of reliance by showing a lack of “price impact” at the class certification stage. In the only federal appellate decision so far, the Eighth Circuit ruled in IBEW Local 98 Pension Fund v. Best Buy Co. Inc. that the defendants successfully rebutted the presumption. The decision strengthens the possibility that a defendant’s liability can be narrowed or extinguished based on price impact evidence during the class certification phase. Defendants have not fared as well in district court decisions in the Ninth, Second, and other Circuits, where courts have rejected defense challenges to the presumption of reliance and granted class certification. Several decisions are headed up on appeal and are expected to address important issues of which side bears the burden of persuasion, and what evidence is admissible as probative of a lack of price impact.
Parties in securities fraud class actions should pay close attention to these developments since these will ascertain whether the tide is turned for defendants seeking to rebut the fraud-on-the-market theory.
Pamela S. Palmer, partner at Pepper Hamilton LLP, will be joining this panel to discuss the fundamental aspects and the critical issues surrounding Halliburton II and fraud-on-the-market theory. The panel will provide an in-depth discussion of this significant topic within the context of Best Buy. Speakers will also offer insights on the implications of the Best Buy decision on securities fraud class actions.
Key topics include:
- Halliburton II overview
- Halliburton II on remand
- The Best Buy decision
- Price impact litigation across the country
- Emerging strategies for rebutting the presumption of reliance
- Implications on class certification in securities fraud class actions