Supreme Court Docket Report - November 15, 2013

Today, the Supreme Court granted certiorari in one case of interest to the business community:

Securities Class Actions—Presumption of Reliance—Fraud on the Market

To prevail in a securities-fraud case under Section 10(b) of the Securities Exchange Act of 1934, a plaintiff must establish—among other things—reliance on the defendant's misrepresentation. When a plaintiff brings such a case as a class action under Fed. R. Civ. P. 23(b)(3), it must show that "the questions of law or fact common to class members predominate over any questions affecting only individual members." Twenty-five years ago, a four-Justice majority recognized a rebuttable presumption of classwide reliance based on the "fraud on the market" economic theory. See Basic Inc. v. Levinson, 485 U.S. 224 (1988). That theory assumes that in an efficient market, all publicly available information about a stock is reflected in the stock's price; and thus, purchases at that price are made in reliance on