This month’s Alert addresses the oral argument before the Supreme Court in Halliburton Co. v.Erica P. John Fund (No. 13-317), in which the Court will consider whether to overrule or modify the fraud-on-the-market presumption of reliance adopted in Basic Inc. v. Levinson, 485 U.S. 224 (1988).
We also discuss two decisions handed down by the Supreme Court in the past several weeks: Chadbourne & Parke LLP v. Troice, 134 S. Ct. 1058 (2014) (Breyer, J.), in which the Court addressed the “in connection with” requirement of the Securities Litigation Uniform Standards Act of 1998 (“SLUSA”); and Lawson v. FMR LLC, 2014 WL 813701 (Mar. 4, 2014) (Ginsburg, J.), in which the Court held that the whistleblower protection provision of the Sarbanes-Oxley Act of 2002 applies to employees of privately held contractors of public companies.
In addition, we address two cases the Supreme Court recently agreed to review: Omnicare, Inc. v. Laborers District Council (No. 13-435), in which the Court will consider the requirements for pleading a claim under Section 11 of the Securities Act of 1933 based on an alleged misstatement of opinion; and Public Employees’ Retirement System of Mississippi v. IndyMac MBS, Inc. (No. 13- 640), in which the Court will determine whether the tolling rule established in American Pipe & Construction Co. v. Utah, 414 U.S. 538 (1974) applies to the three-year limitations period set forth in Section 13 of the Securities Act of 1933, which governs claims under Sections 11 and 12 of the Securities Act.
Finally, we discuss two rulings from the Delaware courts: a Delaware Supreme Court decision holding that the business judgment standard of review applies to controlling stockholder transactions when certain procedural protections are established at the outset; and a post-trial decision from the Delaware Chancery Court holding a financial advisor liable for aiding and abetting directors’ breaches of fiduciary duty in connection with a company’s sale.