The United States Supreme Court and Implied Causes of Action Under SEC Rule 10b-5: The Politics of Class Actions
COLLECTIVE ACTIONS: ENHANCING ACCESS TO JUSTICE AND RECONCILING MULTILAYER INTERESTS, Mathias Siems, Steven van Uytsel and Stefan Wrbka, eds., Cambridge University Press, Forthcoming
24 Pages Posted: 18 Aug 2011 Last revised: 26 Aug 2011
Date Written: August 17, 2011
The chapter discusses how changing attitudes toward class actions have influenced the Supreme Court in cases involving implied private causes of action under SEC Rule 10b-5. As the makeup of the Court changed and issues concerning litigation and class actions became part of the political landscape, the Court’s view of these actions changed. Initially its view was a broad one based upon the need for flexibility and to promote the remedial purposes of the law in order to protect investors and the markets. But societal concerns about litigation abuses and judicial activism and a more pro business attitude moved the Court to narrow the reach of the law and these class actions. Over time new concerns about economic competiveness and global issues involving U.S. stock markets reflected in politics at the time also were important to the Court and reflected in its decisions. This history of the development of these private causes of action and the Court’s interpretation of SEC Rule 10b-5 illustrate how the politics of class actions and shifting attitudes and concerns reflected in society influenced its decisions and development of the law.
Keywords: class actions, collective actions, corporate litigation, federal securities law, implied causes of action, Supreme Court, SEC, securities and exchange commission securities exchange act, securities fraud, securities litigation, securities regulation, 1934 Act, section 10b, rule 10b-5
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