Thanks to two recent U.S. Supreme Court decisions, Amgen v. Connecticut Retirement Plans and Trust Funds, 133 S. Ct. 1184 (2013), and Erica P. John Fund v. Halliburton, 131 S. Ct. 2179 (2011), plaintiffs in securities fraud class actions brought under Section 10(b) of the Securities Exchange Act of 1934 and U.S. Securities and Exchange Commission Rule 10b-5 do not need to prove two of the essential elements of their claim, loss causation and materiality, at the class certification stage. These two judicial alterations to the securities class-action playing field give plaintiffs a strategic advantage in obtaining class certification and, therefore, in increasing the potential settlement value of their claims. Yet, both decisions leave open the question of whether defendants can defeat class certification by rebutting the fraud-on-the-market presumption of reliance with evidence that defendants' alleged misrepresentations did not measurably impact the market price of the security at issue.
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