March 19, 2013

The Eleventh Circuit Rules that the Disclosure of an SEC Investigation is Insufficient to Plead Loss Causation

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The US Court of Appeals for the Eleventh Circuit recently issued an important decision that addresses two types of allegations that plaintiffs routinely rely on to plead loss causation in federal securities fraud cases. In Meyer v. Greene, 2013 US App. LEXIS 4187 (11th Cir. Feb. 25, 2013), the Eleventh Circuit appears to have become the first federal court of appeals to rule definitively that the mere announcement of an investigation by the US Securities and Exchange Commission (“SEC”) followed by a decline in a company’s stock price is insufficient to plead loss causation. The Court also ruled, consistent with decisions from other federal circuits, that a negative third-party analyst presentation is not a corrective disclosure for purposes of pleading loss causation if the presentation is based on publicly available information.

View full memo, "The Eleventh Circuit Rules that the Disclosure of an SEC Investigation is Insufficient to Plead Loss Causation"

Authors and Contributors

Adam Hakki

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Jerome S. Fortinsky

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Daniel H.R. Laguardia

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