George Mason University Antonin Scalia Law School

Halliburton v. Erica P. John Fund: The End of Securities Fraud Litigation?

Event Details

  • Date:
  • Venue: Rayburn House Office Building
  • Division: Civil Justice Academy

Program Description: Within the next few weeks, the Supreme Court will decide whether the cornerstone of securities class action litigation embraced in the1988 case of Basic v. Levinson should remain in intact or be turned on its head as critics have proposed.  The Basic decision allowed the “fraud on the market” theory, which assumes that public information about a company is known to the market, and plaintiffs do not have to show that they relied on a specific misrepresentation to sue those companies. This theory made class action lawsuits in securities fraud cases easier for plaintiffs to pursue and dramatically increased securities class action litigation.  Between 1997 and 2012, more than 3,000 private class action securities fraud lawsuits were filed, generating more than $73 billion in legal settlements.   Before the Supreme Court this term is Halliburton v. Erica P. John Fund, which could potentially chart a new course for these lawsuits, by overturning Basic, limiting the “fraud on the market” theory, or finding a middle ground to allow publicly-traded companies better defenses against securities class actions without overruling a 26-year old precedent that made it easier for plaintiffs to negotiate large settlements.

For More Information, Contact: Congressional Civil Justice Caucus Academy