Securities Law Commons^™

Mismatch: The Misuse Of Market Efficiency In Market Manipulation Class Actions, Charles R. Korsmo

Faculty Publications

Plaintiffs commonly bring two distinct types of claims under Section 1(b) of the Securities Exchange Act of 1934: 1) claims of material misrepresentations or omissions; and 2) claims of trade-based market manipulation. Despite the distinctive features of the two types of claims, courts have tended to treat them identically when applying the “fraud on the market” doctrine. In particular, courts have required both types of plaintiffs to make identical showings that the relevant security traded in an “efficient market” in order to gain a presumption of reliance. The reasons for requiring such a showing by plaintiffs in a misrepresentation case …

Fraud And Federalism: Preempting Private State Securities Fraud Causes Of Action, Michael A. Perino

Faculty Publications

The passage of the Private Securities Litigation Reform Act of 1995 has engendered a significant forum shift in class action securities fraud litigation, from federal to state court. This unintended by-product of the Act has reignited debate over our dual federal-state system of securities regulation and in turn has inspired a discussion as to whether Congress should now preempt state securities fraud causes of action. This article argues that preemption is an appropriate, but not the only, solution to these concerns. To support this argument, this article first traces the history of dual state-federal securities regulation within the context of …

The Pentium Papers: A Case Study Of Collective Institutional Investor Activism In Litigation, Joseph A. Grundfest, Michael A. Perino

Faculty Publications

This article suggests that institutional investors have rational incentives to become more active in the litigation arena, but that the current debate is falsely constrained because it rests on the assumption that institutional investors must participate either by (1) assuming the formal role of lead plaintiff, class representative, or intervenor or, (2) not participating at all. This is a false dichotomy because, as this article demonstrates, institutions have available to them a rich array of flexible, informal, and relatively inexpensive mechanisms by which they can make their views known to litigants and courts alike.

Our hypothesis that institutional investor activism …