Does Dura Matter? Loss Causation and the Implications of Dura Pharmaceuticals V. Broudo

36 Pages Posted: 31 Jul 2009 Last revised: 31 Mar 2010

See all articles by Jonah B. Gelbach

Jonah B. Gelbach

University of California, Berkeley - School of Law

Eric Helland

Claremont McKenna College - Robert Day School of Economics and Finance; RAND

Jonathan Klick

University of Pennsylvania Carey Law School; Erasmus School of Law; PERC - Property and Environment Research Center

Date Written: July 31, 2009

Abstract

Dura Pharmaceuticals v. Broudo has been heralded as the most important securities case of the past decade. Many have suggested that its requirement that plaintiffs provide evidence of a significant stock price decline associated with a corrective disclosure will make it significantly harder to bring securities fraud cases. We use event study techniques to examine how hard it would have been to meet this requirement in a comprehensive dataset of 10b-5 cases in the two decades before Dura was decided. If those cases are representative of what cases might be brought post-Dura, our findings suggest that Dura will not have much of an effect.

Keywords: event study, statistical evidence, securities fraud, 10b-5, Dura, loss causation

JEL Classification: G38, K00, K22, K40, K41

Suggested Citation

Gelbach, Jonah B. and Helland, Eric A. and Klick, Jonathan, Does Dura Matter? Loss Causation and the Implications of Dura Pharmaceuticals V. Broudo (July 31, 2009). CELS 2009 4th Annual Conference on Empirical Legal Studies Paper, Available at SSRN: https://ssrn.com/abstract=1442026 or http://dx.doi.org/10.2139/ssrn.1442026

Jonah B. Gelbach

University of California, Berkeley - School of Law ( email )

215 Boalt Hall
Berkeley, CA 94720-7200
United States

Eric A. Helland

Claremont McKenna College - Robert Day School of Economics and Finance ( email )

500 E. Ninth St.
Claremont, CA 91711-6420
United States
909-607-7275 (Phone)
909-621-8243 (Fax)

RAND ( email )

1776 Main Street
Santa Monica, CA
United States

Jonathan Klick (Contact Author)

University of Pennsylvania Carey Law School ( email )

3501 Sansom Street
Philadelphia, PA 19104
United States
2157463455 (Phone)

Erasmus School of Law ( email )

3000 DR Rotterdam
Netherlands

PERC - Property and Environment Research Center

2048 Analysis Drive
Suite A
Bozeman, MT 59718
United States

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