Supreme Court Upholds “Fraud-on-the-Market” Presumption of Reliance but Holds That Defendants Must Be Permitted to Rebut It at Class Certification

The Supreme Court has issued a key securities ruling that should come as welcome news to corporations and professional firms that find themselves in the crosshairs of private federal securities fraud class actions. In Halliburton v. Erica P. John Fund, No. 13-317, the Court had the opportunity to revisit Basic v. Levinson, one of the most important securities law precedents on the books. Although Halliburton declined to overrule Basic, it gives defendants the assurance that the Basic presumption of reliance can be rebutted at the class certification stage.