A Possible “Midway Position” on the Fraud-on-the-Market Theory in Securities Class Actions?

Summary: Questioning at oral argument on Wednesday in Halliburton Co. v. Erica P. John Fund, Inc. suggested that the Court may adopt a “midway position” on the continued validity of the presumption of class wide reliance established by the fraud-on-the-market theory created by Basic v. Levinson. The Court’s decision has the potential to be one of the most important securities law decisions in decades since it could reshape the requirements to obtain class certification in Section 10(b) class actions.