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Lawyers Weigh In On High Court's Halliburton Ruling

June 23, 2014

​Kevin Muck, chair of Fenwick & West’s securities litigation practice, was quoted by Law360 on the U.S. Supreme Court’s decision in Halliburton Co. et al. v. Erica P. John Fund, in which the court declined to overrule the fraud-on-the-market presumption of reliance, but confirmed that corporate defendants in putative securities class actions may rebut the presumption, prior to the certification of any class, with evidence of lack of price impact.

“The decision gives defendants a potent weapon to dispose of shareholder class actions before costly merits discovery begins, by introducing evidence that the alleged misstatements did not affect the company’s stock price,” Muck told Law360.

“At a more fundamental level, the Supreme Court also provided a much-needed reminder that the fraud-on-the-market presumption is rebuttable,” Muck said. “Over the years, plaintiffs’ lawyers — and even some courts — seem to have lost sight of that principle.”

Overall, Muck observed, “the Halliburton decision wasn’t the home run that many in the defense bar had hoped for, but it’s certainly a solid double.”

The full article is available through the Law360 website (subscription required).