March 06, 2013
Conglomerate Completism: The Supreme Court Just Decided Two Securities Cases
Posted by David Zaring

As Broc Romanek observes, that is indeed rare:

Supreme Court Delivers Two Securities Law Decisions in Single Week!

Last week, the Supreme Court delivered two decisions impacting the securities law. Even one in a term is rare. Some say that securities defendants won one and lost one. Others say differently (for eg. see this blogby Lane Powell's Doug Greene). We have been posting dozens of memos on both Gabelli v. SEC andAmgen v. Connecticut Retirement Plans and Trust Funds in our "Securities Litigation" Practice Area.

The Gabelli court found that five-year statute of limitations period for federal enforcement actions seeking civil penalties begins to run "when the fraud is complete," not when it is discovered by the government (unlike the standard for private plaintiffs). And the Amgen court found that plaintiffs don't need to establish that allegedly false statements were material to the market before they can gain class certification.

Scotusblog naturally has interesting things to say about the cases, not least because it asked Jonathan Macey to blog about Gabelli:

Either the SEC is living in its own little bubble world or else the Commission is operating under some masochistic urge to embarrass itself.  The Supreme Court simultaneously burst the SEC’s bubble and embarrassed the agency in its yesterday’s decision in Gabelli v. Securities and Exchange Commission. The Court rejected the SEC’s proffered interpretation of 28 U.S.C. § 2462, a general statute of limitations that governs many penalty provisions through­out the federal code.


Amgen is interesting because three justices are annoyed that the materiality requirement in the securities laws has bascially been dispensed with.  That's three justices who don't have much use for precedent in this area:

In an unsurprising decision, the Court declined to raise the bar for the certification of securities class actions by requiring plaintiffs to establish the materiality of alleged misstatements to invoke the fraud-on-the-market theory in support of class certification.  Instead, it remains sufficient for plaintiffs to simply plead materiality, and establish the traditional requirements of Rule 23 at the certification stage.

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