|  | | 2004 News and Press Releases | | |
HEADLINE NEWS:
A SMALLER SECURITIES CASE WITH A BIG WALLOP LOSS CAUSATION KEY TO SECURITIES FRAUD
Marcia Coyle
The National Law Journal
. December 27, 2004
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EXCERPT: With billion-dollar frauds involving WorldCom, Enron and others as a backdrop, a smaller securities fraud case packing a potentially huge wallop for investors and corporations will unfold soon in the U.S. Supreme Court. The case, Dura Pharmaceuticals Inc. v. Broudo, No. 03-932, raises an issue fundamental to almost every civil securities fraud case: What is the standard by which plaintiffs must plead and prove loss causation-that misrepresentations or omissions caused the harm. Loss causation is an element of a securities fraud claim under Section 10b of the Securities Exchange Act of 1934. 'We're talking really about the elements of liability under one of the most heavily litigated statutes ever enacted by Congress,' said securities scholar Michael J. Kaufman of Loyola University Chicago School of Law. 'Congress never created a private remedy under 10b, but the courts have. And once a term or so, the Supreme Court takes a question about one of the 10b elements because there is no guidance from Congress.' The seemingly dry legal question of loss causation, to be argued on Jan. 12, belies the high stakes in the case. Long-time allies, banks/investment houses and major public pension funds, stand on opposite sides. |
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