By now, most of us have heard about argument in Halliburton v. Erica P. John Fund, No. 13?317, which took place before the Supreme Court last week. Of course, it is impossible to know how the Court will rule when it issues its opinion later this year—likely in June. However, analysts generally have agreed upon two takeaways from the argument.
First, despite some recognition by the Justices that the efficient market theory underlying Basic Inc. v. Levinson, 485 U.S. 224 (1988), is not perfect, there did not appear to be sufficient support for overruling Basic outright and doing away with a presumption of classwide reliance derived from the fraud-on-the-market theory.
Second, it appears that at least some of the Justices are considering a middle ground that would leave Basic substantially intact but require something more at the class certification stage….
