Client Alert: Supreme Court Clarifies Evidentiary Burden for Rebutting “Fraud on the Market” Presumption of Reliance at Class Certification Stage in Securities Fraud Class Actions

On June 21, 2021, the United States Supreme Court held a defendant in a “fraud on the market” securities fraud class action seeking to rebut the presumption of reliance at the class certification stage must prove that the alleged misrepresentations or omissions did not impact the price of the stock at issue by a preponderance of evidence.  Goldman Sachs Group, Inc. v. Arkansas Teacher Retirement System, --- U.S. --- (2021).  The Court also held that a district court must consider all evidence relating to the lack of impact, even if that evidence goes to the merits of the claim. 

This Client Alert, authored by Partner James J. Boland, details what the decision means.