At a time when class certification has become tougher under recent U.S. Supreme Court precedent, securities plaintiffs scored a major win when the justices ruled that materiality need not be proven at the certification stage of fraud-on-the-market claims.

11-1080 Fulton County Employees Retirement System v. MGIC Investment Corp.

11-1459 McCann v. Hy-Vee, Inc.

The class action on behalf of shareholders of Koss Corp. may proceed, at least in part.

Securities Fraud

Securities Securities fraud; class actions; loss causation Securities fraud plaintiffs need not prove loss causation in order to obtain class certification. It is undisputed that securities fraud plaintiffs must prove certain  things in order to invoke Basic ’s rebuttable presumption of reliance. According  to the Court of Appeals, EPJ Fund had to prove the separate element of loss  causation in ...

Securities ERISA; affiliated purchasers A corporation’s profit sharing plan cannot claim a share of the settlement of a securities fraud action. “[T]he Plan is an affiliate of Motorola and on this basis is excluded from the class, although we arrive at this conclusion by a slightly different analysis. The district court applied the ordinary meaning of the term ‘affiliate,’ but ...

Securities Materiality Where plaintiffs alleged that the defendant failed to disclose a possible link between a product and a side effect, they sufficiently alleged materiality. Applying Basic ’s “total mix” standard here, respondents  adequately pleaded materiality. The complaint’s allegations suffice to “raise a  reasonable expectation that discovery will reveal evidence” satisfying the  materiality requirement, Bell Atlantic Corp. v. Twombly , ...

Securities Receivership Where a receivership trust lacks sufficient assets to fully repay investors and the investors’ funds are commingled, a distribution plan may properly be guided by the notion that “equality is equity,” and pro rata distribution is appropriate. “The goal in both securities-fraud receiverships and liquidation bankruptcy is identical- the fair distribution of the liquidated assets. See In re ...