On April 12, 2024, a unanimous U.S. Supreme Court issued an opinion in Macquarie Infrastructure Corp. v. Moab Partners, L. P.,1 vacating a judgment of the U.S. Court of Appeals for the Second Circuit.
Takeaways - Despite a decline in securities class action filings in 2021, we saw a spike in SPAC-related lawsuits and continued activity in event-driven suits focused on .
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(Reuters) - The U.S. government fundamentally believes in shareholder class actions. Back in 1987, when the U.S. Supreme Court was contemplating the fraud-on-the-market principle that is the framework for securities fraud class actions, the Justice Department, on behalf of the Securities and Exchange Commission, filed an amicus brief in Basic v. Levinson, advising the justices to adopt the presumption that in an efficient market, shareholders rely on a defendant’s misrepresentations.
A quarter-century later, when the Supreme Court revisited the Basic presumption in 2014’s Halliburton v. Erica P. John Fund, DOJ and the SEC reminded that justices that the government relies on investor class actions to help police the market. DOJ filed its Halliburton amicus brief in support of shareholders, arguing that the Supreme Court should leave intact the Basic fraud-on-the-market presumption.
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(Reuters) - Goldman Sachs informed the U.S. Supreme Court on Monday that the court’s 2014 ruling in Halliburton v. Erica P. John Fund has been, well, a flop.
But the bank told the justices they can change that! What the Supreme Court needs to do, Goldman’s lawyers at
Paul, Weiss, Rifkin, Wharton & Garrison argued in the bank’s opening brief in Goldman Sachs v. Arkansas Teacher Retirement System, is remind lower courts just how much leeway defendants are supposed to have in opposing shareholder fraud class actions.
In the 2014 decision, as you surely remember, the Supreme Court left intact the structural premise of securities class actions, in which shareholders are entitled to a presumption of reliance on defendants’ alleged misrepresentations as long as they can show the company’s shares traded in an efficient market. (That premise, in turn, is based on the idea that in an efficient market, the share price reflects all public information.)
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(Reuters) - The U.S. Supreme Court agreed Friday to hear what the investment bank Goldman Sachs has called “the most important securities case to come before the court” since the justices left intact the essential framework of shareholder class actions in 2014’s Halliburton v. Erica P. John Fund. The justices will review a split 2020 decision by the 2nd U.S. Circuit Court of Appeals, which upheld the certification of a class of Goldman Sachs shareholders to proceed with claims that the bank lied to shareholders when it touted its business principles and procedures for averting conflicts with investors.