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Full-Text Articles in Securities Law
The End Of The Securities Fraud Class Action As We Know It, Richard A. Booth
The End Of The Securities Fraud Class Action As We Know It, Richard A. Booth
ExpressO
In this article, I argue that securities fraud class actions (SFCAs) should not be treated as class actions but rather should be treated as derivative actions. In addition, I argue that such actions should be dismissed unless it appears that insiders (including the company itself) have enjoyed gains from trading during the fraud period. Both of these conclusions are based on the fundamental argument that (1) securities law seeks to protect the interests of reasonable investors, (2) reasonable investors diversify, and (3) diversified investors are effectively protected against the supposed financial harms of securities fraud by virtue of being diversified, …
Rediscovering The Economics Of Loss Causation , Richard Kaplan, Madge Thorsen, Scott Hakala
Rediscovering The Economics Of Loss Causation , Richard Kaplan, Madge Thorsen, Scott Hakala
ExpressO
Abstract This article explores the economic principles and theories underlying loss causation in the context of securities fraud litigation. It explains the difference between “investment loss” and recoverable “inflationary loss” and posits that the latter consists of the difference between inflation in stock prices caused by the fraud at the time of purchase and inflation in the price at the time of sale. It reviews scenarios in which inflationary loss due to fraud may occur and would be recognized as a matter of economic theory as well as a matter of law. It urges that Dura v. Broudo Pharmaceuticals, 125 …