Halliburton II: A Loser's History
38 Pages Posted: 7 Mar 2015 Last revised: 31 Mar 2015
Date Written: March 5, 2015
The Supreme Court was presented with an opportunity to bring fundamental reform to securities class actions last term in Halliburton Co. v. Erica P. John Fund, Inc. The Court ducked that opportunity, passing the buck to Congress to undo the mess that the Court had created a quarter century prior in Basic Inc. v. Levinson. Congress’s history in dealing with securities class actions suggests that reform is unlikely to come from the legislature anytime soon. The SEC appears to be satisfied with the status quo as well. With these institutional actors resisting reform, corporations and their shareholders may resort to self-help in dealing with the cost and distraction created by securities class actions. Paradoxically, resistance to reform of securities class actions may result in self-help measures that eliminate securities class actions – and their deterrent value – altogether.
Keywords: Securities fraud class actions, Supreme Court
JEL Classification: K22, K41
Suggested Citation: Suggested Citation