One response to “Prof. Adam Pritchard: Reforming Securities Class Actions Via Shareholder Proposal”

  1. […] Prof. Adam Pritchard: Reforming Securities Class Actions Via Shareholder ProposalLast month, Adam Pritchard, a Professor at the University of Michigan Law School, published a paper in the Cato Supreme Court Review that proposes a way for shareholders of public corporations to “fix” what he calls the mistake of Basic v. Levinson through a shareholder proposal. Basic is the U.S. Supreme Court case that established the fraud on the market theory (FOTM) of damages in securities class action lawsuits. Pritchard writes that Basic “effectively eliminated the reliance requirement for plaintiffs suing large companies whose stock is actively traded — and unwittingly released the floodgates for securities class actions. Plaintiffs, instead of having to allege that they read and relied upon the misstatement before purchasing, could instead claim that the market relied on the lie and it was reflected in the stock price.”(securities ) This was written by Andrew Grossman. Posted on Thursday, October 16, 2008, at 9:00 am. Filed under Uncategorized. Bookmark the permalink. Follow comments here with the RSS feed. Post a comment or leave a trackback. […]