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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