According to the New York Times, last week, the Supreme Court gave companies more leeway to fight investors who come together to pursue claims that they were misled when they bought or sold securities.
The Supreme Court case involved the oil services company Halliburton, which has been involved in multiple settlements over the past decade with investors totaling almost $62 billion.
In its decision, the Supreme Court ruled that defendants facing securities class action lawsuits could try to show at an early stage that their statements did not affect their securities’ market price, rather than waiting for the cases to reach class action status.
The class action lawsuits brought against Halliburton involved statements made on behalf of financial exposure to asbestos claims, expected earnings from its engineering and construction business and the anticipated benefits of a merger, which investors said affected its securities’ market price.
The plaintiffs argued that Halliburton made false statements about claims with the intent to inflate stock prices.
The Supreme Court decision will allow some corporations to defeat some securities fraud claims at the outset, rather than having to put away substantial sums of money in the expectation that a case may reach class action status.
As the Wall Street Journal reported, “companies [will now be able to] present evidence at an early stage in litigation to try to demonstrate that misleading public statements didn’t affect stock prices.”
How Do I File a Securities Class Action Lawsuit?
Securities class action lawsuits occur when an investor has purchased a stock or other security and its value goes down because the company or its management have given an erroneously positive picture of the company’s current or past finances, business prospects, expected business or financial results.
Our lawyers represent investors who have been defrauded by corporations. In securities cases, because a single investor may not be able to sue the company individually, multiple investors may be able to bring a case representing the interest of all investors. That is why this decision by the Supreme Court is important—it has the potential to disrupt this process.
If you have an interest in speaking with an attorney about securities litigation, please contact Gary S. Graifman, Esq. to schedule a free initial consultation or complete the form on this page.
Kantrowitz, Goldhamer & Graifman, P.C. – Class Action Lawyers