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Twenty-five years ago, a four-justice majority of the Supreme Court held, in Basic v. Levinson, 485 U.S. 224 (1988), that a putative class of investors need not prove actual common reliance on a misrepresentation to achieve class certification and prevail upon the merits. Instead, they may invoke a classwide presumption of reliance, the “fraud-on-the-market presumption,” based upon the theory that the market price of a security in an efficient market will immediately incorporate any material, public representation, and thus a purchaser who buys a security at the market price will be presumed to have relied upon the representation. The Supreme Court is now being asked to overrule Basic because (1) its theoretical economic framework, the “efficient capital markets hypothesis,” has been repudiated through scholarly and empirical attack, (2) there has been a high level of inconsistency in the courts regarding market efficiency, which is required to trigger the presumption, and (3) the Basic presumption is inconsistent with recent Supreme Court’s holdings.1

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