Halliburton II and the Price Impact Rule: Then & Now
On July 25, 2015, the U.S. District Court for the Northern District of Texas released its much-awaited decision on remand from the Supreme Court’s decision in Halliburton, Co. v. Erica P. John Fund, Inc., 134 S.Ct. 2398 (2014) (“Halliburton II”). In Halliburton II the United States Supreme Court agreed that Defendants must be permitted to present “appropriate evidence” at class certification that the alleged misrepresentation or omission did not actually affect the price of the stock, notwithstanding the fact that pursuant to the fraud-on-the-market presumption that the Supreme Court adopted in Basic, Plaintiffs are not required to prove either materiality or loss causation at class certification in securities class actions.
The District Court in Halliburton took extensive evidence and held that Halliburton had successfully rebutted the presumption of reliance with respect to five out of six alleged corrective disclosures and thus granted class certification on only one of Plaintiffs’ alleged corrective disclosures. However, other district courts post-Halliburton II have taken a different approach and have adopted a narrow view of Defendants’ ability to rebut the presumption.
Just last week, on April 12, 2016, the Eighth Circuit Court of Appeals in IBEW Local 98 Pension Fund v. Best Buy reversed a district court decision that had granted Plaintiffs’ class certification, and instead ruled that Defendants had successfully rebutted the “Basic presumption” by proving that Defendants’ allegedly fraudulent statements did not impact the stock’s price when the statements were made (i.e., so-called “front-end” impact). Other circuits are similarly confronting appeals from district court decisions granting class certification.
As courts continue to grapple with the ramifications and implications of the Halliburton II decision, it is important for companies to keep themselves abreast of recent developments in this important and fast moving area of the law.
In this two-hour LIVE Webcast, a panel of distinguished professionals and thought leaders assembled by The Knowledge Group will provide the audience with an in-depth discussion of Halliburton II and the Price Impact Rule and will explain important aspects of this significant topic. Speakers will also explain the history of Halliburton and the Price Impact Rule, the economic analysis behind challenging the presumption, and best practices and strategic considerations regarding whether and how to challenge the Basic presumption.
Key issues that will be covered in this course are:
- Halliburton II and the Price Impact Rule
- Ramifications and Implications of the Halliburton II Ruling
- History and Impact of Halliburton II
- Economic Theory and Event Analysis Studies Used In Challenging the Presumption
- Halliburton II’s Differing Application in the Lower Courts
- Best Practices When Challenging the Presumption
- Strategic Considerations Whether or Not to Challenge Certification Based on Price Impact
Michael V. Rella, Attorney
Murphy & McGonigle, PC
- The lay of the land before Halliburton II – including fraud on the market presumption of reliance & Supreme Court decision in Basic
- Halliburton II decision
- Sub-issue: How Halliburton II overrules other decisions
Pamela S. Palmer, Partner, Commercial Litigation, Securities Practice
Pepper Hamilton LLP
- Halliburton II remand decision on class certification
- Battle of the experts
- Who’s burden is it?
- On to Halliburton III?
Matthew Aharonian, Senior Associate
The Brattle Group
- Economic Issues - Event studies and other economic tools
- Implications what these tools mean…Class certification
- What constitutes evidence of price impact and how its effected by decision burdens (along with several sub-topics)
- Alternative economic evidence
Daniel J. Tyukody, Shareholder; Co-Chair, Securities Litigation Practice
Greenberg Traurig, LLP
- Recent court cases like Best Buy and other cases – what language in Halliburton II means
- Decision ramifications – what have courts done since, the posture of Halliburton II in more recent cases
- Strategically, is it a good idea to do a Halliburton II challenge and explain the two opposing points of view
Who Should Attend:
- Securities Lawyers
- Attorneys Defending Class Actions
- Business Lawyers
- Litigation Officers
- Legal Consultants
- Corporate Executives
- General Counsel
- Securities Markets
- Other interested Professionals
Dr. Matthew Aharonian is a financial economist and senior associate with The Brattle Group. He consults and provides expert testimony on issues involving securities pricing, risk management, valuation, damages, structured finance, capital markets, and statistical design/econometrics. Over the past ten years, Matthew has worked on a range of high profile litigation and international arbitration matters, including a number of class actions and other cases centered on the design and use of event studies. He recently co-authored an article discussing event study methodology and class certification post-Halliburton II.
Matthew Aharonian has a MA in Economics from McGill University and a PhD in Economics from the University of British Columbia. He has taught fixed-income securities at the graduate level, and is currently seconded to Brattle’s Toronto office as the head of Brattle’s Canadian securities practice.
Dr. Matthew Aharonian is a financial economist and senior associate with The Brattle Group. He consults and provides expert testimony …
Michael V. Rella has extensive experience representing clients in federal and state courts across the country, including hedge funds, financial institutions, market makers, corporations, and directors and officers. He focuses his practice on securities-related litigation and complex commercial disputes. His experience includes serving as trial counsel in numerous matters in which he achieved favorable outcomes on his clients’ behalf. He frequently publishes articles on securities-related issues, and has been recognized as a New York Rising Star.
Michael V. Rella has extensive experience representing clients in federal and state courts across the country, including hedge funds, financial …
Pamela S. Palmer is a partner in the Commercial Litigation Practice Group of Pepper Hamilton LLP in the Los Angeles and Orange County offices. Ms. Palmer represents companies, officers, directors and professionals in securities lawsuits, class actions, shareholder derivative suits, mergers and acquisitions litigation, fiduciary and business judgment cases, complex business litigation and SEC matters. She also advises boards and special committees in corporate investigations involving whistleblowers, shareholder demands and auditor-initiated investigations and advises on corporate governance, disclosure, indemnification and D&O coverage.
Pamela S. Palmer is a partner in the Commercial Litigation Practice Group of Pepper Hamilton LLP in the Los Angeles …
Dan is Co-Chair of the firm's Securities Class Action Practice. He focuses his practice on securities litigation and regulatory enforcement matters. He has nearly 30 years’ experience defending issuers, officers and directors, and underwriters in securities class actions, derivative cases, M&A cases and SEC proceedings. Dan also counsels audit committees and special committees in conducting internal investigations. He is a frequent commentator on securities law topics and has been quoted in The New York Times, The Wall Street Journal, The National Law Journal, The Los Angeles Daily Journal, Securities Law 360, Compliance Weekly as well as other publications.
Dan has been named one of the nation’s top securities litigators by Chambers USA: America’s Leading Lawyers for Business, The Legal 500 U.S., Lawdragon Magazine, Benchmark Litigation and the Los Angeles Daily Journal.
Dan is Co-Chair of the firm's Securities Class Action Practice. He focuses his practice on securities litigation and regulatory enforcement …
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About The Brattle Group
The Brattle Group provides consulting and expert testimony in economics, finance, and regulation to corporations, law firms, and governments around the world. We aim for the highest level of client service and quality in our industry.
We advise clients and provide expert testimony in a range of matters involving alleged violations of federal securities laws. Our experience includes work in class actions, derivatives, executive compensation, stock options, asset-backed securities, ERISA actions, breach of fiduciary duty, valuation, and bankruptcy. Our expertise is grounded in a thorough understanding of finance and economic theory, accounting, financial products, capital markets, regulation, and industry custom and practice.
Our principals and academic advisors have wide ranging academic qualifications and industry experience. We also draw on a broader network of leading academic and industry experts to meet the needs of particular cases.
About Murphy & McGonigle, PC
Murphy & McGonigle serves the litigation, enforcement defense, and regulatory counseling needs of clients across the full spectrum of the financial services industry – from national banks, broker-dealers, investment advisers, and hedge funds, to national and international securities markets and exchanges. Many of the firm’s partners formerly served in senior positions at the U.S. Department of Justice, SEC, FINRA, and CFTC and several served in senior executive positions in major financial institutions on Wall Street.
Murphy & McGonigle, founded in 2010, was created based on an innovative law firm model that rigorously controls overhead while providing its attorneys and clients with state-of-the-art technology and litigation support to ensure both world-class service and maximum cost-efficiency.
Murphy & McGonigle operates out of offices in New York, Washington, D.C., and Richmond, Virginia.
For more information about the firm, please visit www.mmlawus.com.
About Pepper Hamilton LLP
Pepper Hamilton LLP is a multi-practice law firm with more than 500 lawyers nationally. The firm provides corporate, litigation and regulatory legal services to leading businesses, governmental entities, nonprofit organizations and individuals throughout the nation and the world.
The firm’s Litigation and Dispute Resolution Department is more than 250 lawyers strong, led by some of the best trial lawyers in the country, who carefully train the firm’s associates and other professionals in the skills needed to prevail in the courtroom and at the negotiating table. Whether it is a TRO or a mass tort, a class action or an international arbitration, Pepper has the trial experience necessary to fight and win the toughest cases.
About Greenberg Traurig, LLP
Greenberg Traurig, LLP is an international, multi-practice law firm with approximately 1900 attorneys serving clients from 38 offices in the United States, Latin America, Europe, Asia, and the Middle East. The firm helps clients bridge diverse legal systems and cultures, with a focus on efficient and effective strategic advice and legal services. The firm is No 1. on the 2015 Law360 Most Charitable Firms list, third largest in the U.S. on the 2015 Law360 400, Top 20 on the 2015 Am Law Global 100, and among the 2015 BTI Brand Elite. More information at: www.gtlaw.com.