A Year Later: The Impact of Halliburton II Is Still Developing

In June 2014, the Supreme Court issued its decision in Halliburton Co. v. Erica P. John Fund Inc. ("Halliburton II"), a putative class action in which Halliburton investors alleged that the company made misrepresentations designed to inflate its stock price, in violation of section 10(b) of the Securities Exchange Act of 1934 and Securities and Exchange Commission Rule 10b-5. 134 S. Ct. 2398 (2014). Of particular importance were two major holdings. First, the Court extended its holding in Basic Inc. v. Levinson, 485 U.S. 224 (1988) to allow putative securities fraud class members to prove the causation/reliance element of a securities fraud claim at the class certification stage "by invoking a presumption that the price of stock traded in an efficient market reflects all public, material information—including material misrepresentations." Id. at 2414. Second, the Court held that securities class action defendants must be given the opportunity to rebut this presumption