In a decision described by Reuters as a “boon for securities class action defendants,” the Second Circuit provided guidance on how defendants may establish a “price impact” defense to class certification. The Second Circuit explained that courts “must be skeptical” of “price impact” whenever there is a “mismatch” in specificity between an alleged misstatement and a purported corrective disclosure. In such circumstances, courts must conduct a “searching” inquiry to determine whether the defendant’s more generic statement actually propped up its stock price.
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