Tomorrow is the first Monday in October, and the Supremes will be back in session. So far, the Court’s docket includes two securities cases.
First, on November 5, the Court will hear oral argument in Amgen v. Connecticut Retirement Plans. This is the latest in what is becoming a series of Supreme Court cases involving which elements of a 10b-5 claim plaintiffs need to prove in order to have a class action certified. Two years ago, in Erica P. John Fund v. Halliburton, the Court reversed a 5th Circuit ruling that required plaintiffs to prove loss causation to certify a class. (Here at the Conglomerate, we hosted a mini-forum on that case as well as a post-mortem). In this current round, the fraud-on-the market theory returns to the justices. The Court will now rule on whether plaintiffs need to prove materiality before a 10b-5 class can be certified. It might also rule on whether the defendant can offer a rebuttal on materiality at the class certification stage.
Second, the Court just granted cert in an odd SEC enforcement case, Gabelli v. SEC, to resolve when the five year statute of limitations (in 28 U.S.C. § 2462) starts to run for the SEC to bring a case. This particular SEC enforcement action involves a mutual fund market timing case, with Judge Jed Rakoff (who has become the most influential federal judge on securities law matters) issuing the trial court opinion.
And looming in the background, the constitutional challenges to Dodd-Frank are congealing. Several states recently joined that portion of this blunderbuss lawsuit against Dodd-Frank that challenges the FDIC Orderly Liquidation Authority. With plaintiffs casting this broad of a net and a D.C. Circuit that has not been gunshy about striking down financial regulation, it would be surprising if some part of Dodd-Frank does not end up before the Supreme Court within the next two years. There will be that much more of a demand for conversation between public law and financial regulation scholars and practitioners.
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