The US Supreme Court has essentially maintained the status quo in corporate securities fraud litigation.
The Court had taken up for consideration a lower court case which overturned the 25 year precedent, set in Basic v Levinson that aids plaintiff’s counsel in obtaining class certification. (Click here for background on the issue and the case.)
Statistics show that once a class is certified, a high percentage of corporate defendants settle rather than go to trial.
Hopes were high among corporate executives and their legal advisers (potential “defendants”) that the Court would even the playing field by raising the bar which plaintiff’s counsel must meet to obtain class certification.
The defendants’ small victory is that the Court made uniform among the lower courts the procedure that defendants can challenge, at the class certification stage, a key assumption that fraudulent information provided by the defendants impacted the defendant’s stock price.