Securities Lawyers Blog
The Supreme Court on Wednesday, MArch 5, 2014, seemed poised to impose new limits on securities fraud suits – making it harder for investors to group together to bring claims that they were misled when they bought or sold securities.
Organizations facing fraud class actions prefer to have the case certified as late in the litigation as possible because once a class is certified, the damages can be so enormous that most companies settle. “Once you get the class certified, the case is over,” Justice Antonin Scalia said on Wednesday.
Several justices, including Justice Anthony Kennedy, suggested that this phenomenon could be partly addressed through a proposal by two law professors that argued plaintiffs should be required to show at an early stage “whether the alleged fraud affected market price.”