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Justices Should Clarify Securities Fraud Loss Causation - Corporate/Commercial Law

To print this article, all you need is to be registered or login on Mondaq.com. 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

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