Implications for Market Efficiency and Damages Analysis of Plaintiff Interpretations of Halliburton II’s Statement that ‘market efficiency is a matter of degree.’

Thu May 07 10:16:47 EDT 2015
Dr. David Tabak

On June 23, 2014, the Supreme Court issued its ruling in Halliburton Co. v. Erica P. John Fund, Inc. (“Halliburton II”) that prior case law “affords defendants an opportunity to rebut the presumption by showing, among other things, that the particular misrepresentation at issue did not affect the stock’s market price.” While this has generally been considered the key holding, the Court affirmed its prior ruling in Basic, Inc. v. Levinson, mentioning that the “presumption of reliance thus does not rest on a ‘binary’ view of market efficiency” and that the “markets for some securities are more efficient than the markets for others.” In this article for the Loyola University Chicago Law Journal, NERA Senior Vice President Dr. David Tabak discusses challenges to plaintiff analyses of damages based on stated plaintiff interpretations of the Halliburton II ruling on market efficiency.