In an unsurprising decision, the Court declined to raise the bar for the certification of securities class actions by requiring plaintiffs to establish the materiality of alleged misstatements to invoke the fraud-on-the-market theory in support of class certification.
At oral argument on Monday in Amgen v. Connecticut Retirement Plans and Trust Funds, the Court addressed (1) whether plaintiffs must establish materiality to invoke the “fraud-on-the-market” theory when seeking certification of a securities class action; and (2) whether defendants must have the opportunity to rebut materiality when opposing class certification.
Securities plaintiffs must demonstrate reliance on a material misrepresentation in order to prove a violation of Section 10(b) of the Securities Exchange Act and SEC Rule 10-b.
In a predictable decision, the Court determined that the limitations period for insider trading claims under Section 16(b) of the Securities Exchange Act of 1934 is not as novel as either of the parties advocated and that, instead, it remains subject to traditional equitable tolling analysis as argued by the government.
Yesterday the Court heard oral argument in Credit Suisse Securities v. Simmonds and considered whether the limitations period for Section 16(b) insider trading claims under the Exchange Act of 1934 is ever subject to tolling and, if so, for how long.
Section 16(b) of the Exchange Act provides that “no . . . suit shall be brought more than two years after the date such profit was realized” from the alleged shortswing transactions.
On Monday, in a five-four decision, the Court reversed the judgment of the Fourth Circuit and held that even a party “significantly involved in preparing” an allegedly false statement does not “make” that statement within the meaning of Rule 10b-5.
On Tuesday, the Court heard oral argument in Janus Capital v. First Derivative Traders.
On Tuesday, December 7, the Court will hear oral arguments in Janus v. First Derivative Traders.