%0 Journal Article
%T Dura¡¯s Effect on Securities Class Actions
%A Scotland M. Duncan
%J Journal of Law and Commerce
%D 2008
%I University Library System, University of Pittsburgh
%R 10.5195/jlc.2008.11
%X On April 19, 2005, the United States Supreme Court rendered a unanimous decision in Dura Pharmaceuticals, Inc. v. Broudo, which had been described as ¡°the most important securities case in a decade.¡± Simply put, the decision raises the pleading standard for Rule 10b-5 cases asserting fraud-onthe-market; instead of requiring a showing of ex ante losses, such as inflation at the time of purchase, Dura requires a showing of ex post losses, such as market decline resulting from a corrective disclosure. This paper assesses the decision¡¯s practical implications by examining and empirically testing whether the Supreme Court¡¯s enhanced pleading requirements have impacted the frequency and magnitude of post-Reform Act (PSLRA) class action securities cases. Specifically, this paper examines Dura¡¯s effect on the filing and settling of cases, as well as on settlement amount. In particular, the results suggest that Dura, ceteris paribus, has had a statistically significant impact on both the filing and settlement of class actions, suggesting a reduction in frivolous litigation.
%U http://jlc.law.pitt.edu/ojs/index.php/jlc/article/view/11