- Legal Expert News
- Law Firm News
- Career News
- Headline Legal News
- Legal Trend News
- Legal Business
- Local Court News
- Court Watch
- Legal Interview
- Topics in Legal News
- Press Release
- Politics & Legal
- Market News
- Courts: Bail reform working, but sustainable funding needed
- Catalan politicians in Spanish court in secession probe
- Supreme Court blocks some redrawn North Carolina districts
- Court allows Pennsylvania to redraw GOP-favored district map
- Court rules that Kushner firm must disclose partners' names
- Court rules Puigdemont must return to Spain for re-election
- Analysis: Outside groups may factor in Arkansas court race
- Pennsylvania GOP take gerrymandering case to US high court
- Top Pakistani court orders arrest of escaped police officer
- Malaysia's top court annuls unilateral conversions of minors
The justices hear arguments Wednesday in an appeal by Halliburton Co. that seeks to block a class-action lawsuit claiming the energy services company inflated its stock price.
A group of investors says it lost money when Halliburton's stock price dropped after revelations the company misrepresented revenues, understated its liability in asbestos litigation and overstated the benefits of a merger.
Justices threw out the company's first attempt to block the lawsuit in 2011. But Halliburton is now urging the court to overturn a 25-year-old decision that sparked a tidal wave of securities-related, class-action lawsuits against publicly traded companies and has led to billions in settlements.
The court's 1988 decision in Basic v. Levinson says shareholders who claim they were defrauded by false statements in securities filings don't have to prove they actually relied on the statements. Rather, the court reasoned that any misrepresentation would be reflected in the current stock price. Even if investors are not aware of the misstatements, they are presumed to be aware of them because they affect the stock price.
This presumption, known as the "fraud-on-the-market theory," has become the driving force for modern class-action securities cases. But some economists have questioned whether this theory makes sense anymore, saying it doesn't account for the sometimes random and arbitrary nature of stock trading.
Legal News Media
Legal News is the top headline legal news provider for lawyers and legalprofessionals. Read law articles and breaking news from law firm's across the United States to get the latest updates. We reserve the right, at our discretion, to change, modify, add, or remove portions of the site at any time. Your This site is solely for your personal use. You are, of course, welcome to print or otherwise copy material from this site for your personal use. However, you may not distribute, exchange, modify, sell or transmit anything you copy from this Site, including but not limited to any text, images, audio and video, for any business, commercial or public purpose. Any unauthorized use of the text, images, audio and video may violate copyright laws, trademark laws, the laws of privacy and publicity and civil and criminal statutes.