Posts Tagged ‘securities litigation’

Andrew Pincus on Halliburton

The Supreme Court’s refusal to revisit the fraud-on-the-market presumption in securities litigation leaves intact an economically irrational system that mostly benefits lawyers. “Indeed, the Court’s decision almost certainly will make this litigation even more expensive by increasing the scope of the class certification inquiry (while not changing the result in many cases). That means even more money out of the pockets of shareholders and into the pockets of lawyers and economic experts.” [Mayer Brown, earlier]

The Court’s missed opportunity in securities law

In yesterday’s Supreme Court decision in Halliburton v. Erica P. John Fund, the Court unanimously agreed to narrow procedural relief for the corporate defendant, but declined 6-3 to revisit its 1988 mistake in creating from whole cloth the “fraud on the market” theory in Basic, Inc. v. Levinson. I have more at Cato at Liberty. Earlier on Halliburton v. Erica P. John Fund here. More: Kevin LaCroix, & welcome Stephen Bainbridge, SCOTUSBlog readers.

More: Alden Abbott and Thom Lambert at Truth on the Market; Bainbridge with roundup of commentary; Beck, Drug & Device Law, on implications for concept of reliance in that area.

Banking and finance roundup

Banking and finance roundup

Halliburton Co. v. Erica P. John Fund, Inc.: SCOTUS considers shareholder class actions

Andrew Grossman reports on yesterday’s oral argument in Halliburton v. Erica P. John Fund, which “may be the biggest business case of the term. …Basic [Basic v. Levinson, 1988, in which the Court dispensed with the reliance requirement in favor of the “fraud on the market” theory] came at the tail-end of the Court’s decades-long experiment in policymaking by creating and defining the contours of civil actions. … The chief barrier to overturning Basic may not be its logic, its wisdom, or even its correctness as a matter of law, but instead stare decisis.” Earlier here, here, here, and here.

More: Kaye Scholer (possible “midway position” with impact on stock price considered at stage of class certification).

Financial and banking roundup

  • Following vindication, Mark Cuban begins transcribing transcripts of other SEC trials on his blog [Blog Maverick, background] “Why Settling With The SEC Can Be Worse Than Losing At Trial” [John J. Carney, David Choi and Francesca Harker]
  • Congress needs to investigate whether administration browbeat Standard & Poor’s over sovereign debt rating [John McGinnis]
  • As regs squeeze banks out of small business lending, will we like non-bank alternatives as well? [John Cochrane] More: Kevin Funnell;
  • Cash business can’t bank its proceeds: “Robber gangs terrorize Colorado pot shops” [NBC News]
  • “Will Plaintiff Lawyers Cut Down On The Choices In Your 401(k)?” [Daniel Fisher]
  • Does Delaware have an incentive to keep securities lawyers happy with big fees? [Bainbridge]
  • “It’s Time To Grill the Federal Reserve About Bitcoin” [Ira Stoll]

Supreme Court and constitutional law roundup

  • SCOTUS to hear case of Susan B. Anthony List v. Driehaus, First Amendment challenge to state laws regulating truth of political speech [IJ/Cato amicus cert brief]
  • Groups of law professors file amicus briefs in Halliburton Co. v. Erica P. John Fund, Inc. arguing that retreat from “fraud on the market” theory is consistent with modern scholarship on capital market efficiency [John Elwood] and sound statutory construction [Elwood, Bainbridge]
  • Behind the Michigan affirmative action plan in Schuette, including colorful background of litigant BAMN (“By Any Means Necessary”) [Gail Heriot, Federalist Society “Engage”]
  • Court dismisses Mulhall v. UNITE HERE (challenge to employer cooperation agreement with union as “thing of value”) as improvidently granted [Jack Goldsmith, On Labor, earlier]
  • Affordable Care Act saga has taken toll on rule of law [Timothy and Christina Sandefur, Regulation]
  • Lol-worthy new Twitter account, @clickbaitSCOTUS, with content like “The nine words no appellate advocate wants to read” [re: Madigan v. Levin]
  • Drug War vs. Constitution at Supreme Court, 1928: Drug War won by only one vote and you might not predict who wrote the most impassioned dissent [my Cato post]

Banking and finance roundup

  • J.P. Morgan and the Dodd-Frank system: “With Wall Street’s capable assistance, government has managed to institutionalize and monetize the perp walk.” [Michael Greve, related from Greve on the self-financing regulatory state]
  • Harvard needs to worry about being seen as endorsing its affiliated Shareholder Rights Project [Richard Painter]
  • Under regulatory pressure, J.P. Morgan “looking to pull back from lending to politically incorrect operations like pawn shops, payday lenders, check cashers” [Seeking Alpha]
  • Rare securities class action goes to trial against Household lending firm, HSBC; $2.46 billion judgment [Reuters]
  • Car dealers only thought they were winning a Dodd-Frank exemption from CFPB. Surprise! [Carter Dougherty/Bloomberg, Funnell]
  • “Memo to the Swiss: Capping CEO Pay is not an Intelligent Way of dealing with Income Inequality” [Bainbridge]
  • American Bankers Association vs. blogger who compiled online list of banks’ routing numbers [Popehat]

Supreme Court and constitutional law roundup