Securities Class Actions: U.S. Supreme Court Holds That Materiality Need Not Be Proven at Class Certification Stage To Trigger the “Fraud-on-the-Market” Presumption of Reliance in Securities Fraud Actions

Sullivan & Cromwell LLP - February 28, 2013

In Amgen Inc. v. Connecticut Retirement Plans & Trust Funds, No. 11-1085 (Feb. 27, 2013), the U.S. Supreme Court held that a plaintiff in a Section 10(b) securities fraud class action need not demonstrate the materiality of the alleged misstatement(s) in order to certify a class based on the “fraud-on-the-market” presumption. Amgen, along with the Supreme Court’s earlier decision in Erica P. John Fund, Inc. v. Halliburton Co., 563 U.S. ___ (2011), limit defendants’ potential arguments against class certification in Section 10(b) actions.