{"id":38149,"date":"2023-12-18T17:39:33","date_gmt":"2023-12-18T17:39:33","guid":{"rendered":"https:\/\/fideres.com\/?p=38149"},"modified":"2024-02-05T10:48:19","modified_gmt":"2024-02-05T10:48:19","slug":"after-goldman-trouble-getting-to-class","status":"publish","type":"post","link":"https:\/\/fideres.com\/after-goldman-trouble-getting-to-class\/","title":{"rendered":"After Goldman &#8211; Trouble Getting to Class"},"content":{"rendered":"<h2>Key Points<\/h2>\n<ul>\n<li>Fideres has analyzed a sample of 10b-5 filings to determine the impact of the Supreme Court\u2019s 2021 <em>Goldman\u00a0<\/em>ruling.<\/li>\n<li>We find that, since the ruling, the percentage of 10b-5 cases where defendants have challenged price impact has jumped from 17% to 44%.<\/li>\n<li>Defendants further appear to spend more resources on price impact rebuttal following that ruling, as reflected by a much larger propensity to rely on expert witnesses, which more than doubled since the <em>Goldman\u00a0<\/em>decision.<\/li>\n<li>At the heart of the <em>Goldman<\/em> class certification challenge was an alleged mismatch in the genericness of alleged misrepresentations and their corresponding corrective disclosures. However, defendants tend to cite to <em>Goldman<\/em> in a broader context, with only 21% of defendants that challenge price impact doing so on ground of the alleged misrepresentations being overly generic.<\/li>\n<\/ul>\n<h2>Background<\/h2>\n<h3>Price Impact in Securities Fraud Litigation<\/h3>\n<p>In securities class action matters, an alleged misrepresentation is considered to have \u201cprice impact\u201d if it affects the market price of the security. Price impact is closely linked to the concept of class-wide reliance on alleged misrepresentations, which plaintiffs must establish before a class can be certified. Since <em>Basic v. Levinson<\/em>, reliance is <em>presumed<\/em> for securities trading in efficient markets.<span style=\"font-family: proxima-nova-light;\"><sup>1<\/sup><\/span> However, following the Supreme Court\u2019s 2015 ruling in <em>Halliburton II<\/em>, defendants are allowed to rebut the reliance assumption with direct evidence that the alleged misrepresentations had no price impact.<sup>2<\/sup><\/p>\n<p>To evaluate price impact, two general approaches are possible. The first measures whether there is a \u201cfront-end\u201d price reaction at the time the misrepresentations are made. The absence of a front-end price reaction, however, does not necessarily indicate an absence of price impact. For instance, if defendants fail to disclose a significant negative development, this may not lead to an immediate increase in price, but it could still have an impact by preventing the price from falling.<\/p>\n<p>In such situations, a second, more indirect, approach is often applied. This entails analyzing the \u201cback-end\u201d price reaction at the time the truth emerges through corrective disclosures. Plaintiffs typically argue that back-end negative price reactions indicate that the initial misrepresentations indeed had a price impact.<\/p>\n<p>In response, defendants often claim that the corrective disclosures are unrelated to the misrepresentation in terms of their content, and that, therefore, back-end price drops do not indicate front-end price impact. Prior to <em>Goldman<\/em>, lower courts often put little weight on such arguments at the class certification stage, viewing them as equivalent to an assessment of materiality or loss causation, which, since <em>Amgen<\/em>, are reserved for the later merits stage.<span style=\"font-family: proxima-nova-light;\"><sup>3<\/sup><\/span><sup>, 4<\/sup><\/p>\n<h3>The 2021 Supreme Court Ruling in <em>Goldman<\/em><\/h3>\n<p>The Supreme Court\u2019s 2021 <em>Goldman<\/em> order, which applies to the back-end approach described above, changed this. It ruled that, when the misrepresentation is generic (e.g., \u201cwe have faith in our business model\u201d) but the corrective disclosure is specific (e.g., \u201cour fourth quarter earnings did not meet expectations\u201d), \u201cit is less likely that the specific disclosure actually corrected the generic misrepresentation, which means that there is less reason to infer front-end price inflation\u2014that is, price impact\u2014from the back-end price drop.\u201d<span style=\"font-family: proxima-nova-light;\"><sup>5<\/sup><\/span>\u00a0More sweepingly, it stated that courts assessing price impact \u201c\u2019should be open to all probative evidence on that question\u2014qualitative as well as quantitative\u2014aided by a good dose of common sense.\u2019 That is so regardless of whether the evidence is also relevant to a merits question like materiality.\u201d<span style=\"font-family: proxima-nova-light;\"><sup>6<\/sup><\/span><\/p>\n<h3>Lower Court Rulings Since <em>Goldman<\/em><\/h3>\n<p>Following the Supreme Court\u2019s <em>Goldman<\/em> ruling, the case returned to the second circuit Court of Appeals. On August 10, 2023, that court released its own long-awaited ruling. Based on the Supreme Court\u2019s guidance, it decertified the Goldman class, setting a potentially important precedent for other courts.<span style=\"font-family: proxima-nova-light;\"><sup>7<\/sup><\/span> The Court of Appeals argued that, in its previous certification of the class, the District Court had failed to properly factor in the mismatch in genericness between the alleged misstatements and the corrective disclosures.<\/p>\n<p>In March 2023, similarly, the ninth circuit denied class certification related to a subset of allegations on grounds of a mismatch in genericness, citing the Supreme Court\u2019s <em>Goldman<\/em> decision.<span style=\"font-family: proxima-nova-light;\"><sup>8<\/sup><\/span><\/p>\n<h2>Trends in Defendants\u2019 Filing Activity Following <em>Goldman<\/em><\/h2>\n<p>An important question is whether defendants challenged price impact more vigorously at the class certification stage following <em>Goldman<\/em>. To answer the question, Fideres identified a preliminary sample of 90 10b-5 matters in which plaintiffs filed a motion for class certification between June 21, 2020 (one year prior to the Supreme Court ruling) and September 1, 2023. For each matter, we determined whether defendants filed an opposition to class certification, and if so, whether the filing challenged price impact.<span style=\"font-family: proxima-nova-light;\"><sup>9<\/sup><\/span><\/p>\n<p>As Figure 1 and the table below show, defendants challenged price impact in 17% of the cases that reached the class certification stage in the year prior to the Supreme Court ruling. The corresponding number after the ruling is 44%, more than twice as high.<span style=\"font-family: proxima-nova-light;\"><sup>10<\/sup><\/span><\/p>\n<p style=\"text-align: center;\"><img decoding=\"async\" loading=\"lazy\" class=\"aligncenter wp-image-38099 size-full\" src=\"https:\/\/fideres.com\/wp-content\/uploads\/2023\/12\/Figure-1.png\" alt=\"\" width=\"2840\" height=\"1336\" srcset=\"https:\/\/fideres.com\/wp-content\/uploads\/2023\/12\/Figure-1.png 2840w, https:\/\/fideres.com\/wp-content\/uploads\/2023\/12\/Figure-1-300x141.png 300w, https:\/\/fideres.com\/wp-content\/uploads\/2023\/12\/Figure-1-1024x482.png 1024w, https:\/\/fideres.com\/wp-content\/uploads\/2023\/12\/Figure-1-768x361.png 768w, https:\/\/fideres.com\/wp-content\/uploads\/2023\/12\/Figure-1-1536x723.png 1536w, https:\/\/fideres.com\/wp-content\/uploads\/2023\/12\/Figure-1-2048x963.png 2048w\" sizes=\"(max-width: 2840px) 100vw, 2840px\" \/><em style=\"font-family: proxima-nova-light; font-size: 8pt;\">Note: The first bar reflects 10b-5 cases where plaintiffs filed for class certification in the one-year period preceding the June 21, 2021 Supreme Court Goldman ruling. The second bar reflects cases where plaintiffs filed for class certification between June 21, 2021 and September 1, 2023.<\/em><\/p>\n\n<div class=\"wpdt-c row wpDataTableContainerSimpleTable wpDataTables wpDataTablesWrapper\n\"\n    >\n        <table id=\"wpdtSimpleTable-54\"\n           style=\"border-collapse:collapse;\n                   border-spacing:0px;\"\n           class=\"wpdtSimpleTable wpDataTable\"\n           data-column=\"3\"\n           data-rows=\"3\"\n           data-wpID=\"54\"\n           data-responsive=\"0\"\n           data-has-header=\"0\">\n\n                    <tbody>        <tr class=\"wpdt-cell-row \" >\n                            <td class=\"wpdt-cell wpdt-bc-535776 wpdt-tc-F7F7F7\"\n                                    data-cell-id=\"A1\"\n                data-col-index=\"0\"\n                data-row-index=\"0\"\n                style=\" width:33.333333333333%;                padding:10px;\n                \"\n                >\n                                Filing Date for Plaintiff\u2019s Motion for\n  Class Certification                <\/td>\n                                            <td class=\"wpdt-cell wpdt-tc-F7F7F7 wpdt-bc-535776\"\n                                    data-cell-id=\"B1\"\n                data-col-index=\"1\"\n                data-row-index=\"0\"\n                style=\" width:33.333333333333%;                padding:10px;\n                \"\n                >\n                                Number of Plaintiff Motions for Class\n  Certification                <\/td>\n                                            <td class=\"wpdt-cell wpdt-bc-535776 wpdt-tc-FFFFFF\"\n                                    data-cell-id=\"C1\"\n                data-col-index=\"2\"\n                data-row-index=\"0\"\n                style=\" width:33.333333333333%;                padding:10px;\n                \"\n                >\n                                Defendants Oppose, Challenging Price Impact                <\/td>\n                                        <\/tr>\n                            <tr class=\"wpdt-cell-row \" >\n                            <td class=\"wpdt-cell wpdt-bc-F2F2F2\"\n                                    data-cell-id=\"A2\"\n                data-col-index=\"0\"\n                data-row-index=\"1\"\n                style=\"                padding:10px;\n                \"\n                >\n                                June 21, 2020 - June 20, 2021 (before\n  Supreme Court ruling)                <\/td>\n                                            <td class=\"wpdt-cell wpdt-bc-F2F2F2\"\n                                    data-cell-id=\"B2\"\n                data-col-index=\"1\"\n                data-row-index=\"1\"\n                style=\"                padding:10px;\n                \"\n                >\n                                24                <\/td>\n                                            <td class=\"wpdt-cell wpdt-bc-F2F2F2\"\n                                    data-cell-id=\"C2\"\n                data-col-index=\"2\"\n                data-row-index=\"1\"\n                style=\"                padding:10px;\n                \"\n                >\n                                17%                <\/td>\n                                        <\/tr>\n                            <tr class=\"wpdt-cell-row \" >\n                            <td class=\"wpdt-cell wpdt-bc-D7D7D7 wpdt-tc-000000\"\n                                    data-cell-id=\"A3\"\n                data-col-index=\"0\"\n                data-row-index=\"2\"\n                style=\"                padding:10px;\n                \"\n                >\n                                June 21, 2021 - September 1, 2023 (after\n  Supreme Court ruling)                <\/td>\n                                            <td class=\"wpdt-cell wpdt-bc-D7D7D7 wpdt-tc-000000\"\n                                    data-cell-id=\"B3\"\n                data-col-index=\"1\"\n                data-row-index=\"2\"\n                style=\"                padding:10px;\n                \"\n                >\n                                66                <\/td>\n                                            <td class=\"wpdt-cell wpdt-bc-D7D7D7\"\n                                    data-cell-id=\"C3\"\n                data-col-index=\"2\"\n                data-row-index=\"2\"\n                style=\"                padding:10px;\n                \"\n                >\n                                44%                <\/td>\n                                        <\/tr>\n                    <\/table>\n<\/div><style id='wpdt-custom-style-54'>\nh2.wpdt-c {\n    display: none;\n}\n.wpdt-c.wpDataTableContainerSimpleTable .wpdtSimpleTable.wpDataTable {\n    font-family: 'proxima-nova-light';\n}\n.wpdt-c .wpdt-bold {\n    font-weight: 600 !important;\n}\n\n@media only screen and (min-width: 992px)  {\n    table#wpdtSimpleTable-7 {\n    width: 600px;\n}\n    table#wpdtSimpleTable- {\n    width: 600px;\n} \n    table#wpdtSimpleTable- {\n    width: 600px;\n    }\n}\n table#wpdtSimpleTable-12 {\n    width: 600px;\n    } \n\n table#wpdtSimpleTable-13 {\n    width: 800px;\n    }   \n\n table#wpdtSimpleTable-14 {\n    width: 600px;\n    }   \n    \n table#wpdtSimpleTable-8 {\n    width: 600px;\n    }   \n\n table#wpdtSimpleTable-19 {\n    width: 600px;\n    }   \n\ntable#wpdtSimpleTable-20 {\n    width: 600px;\n    }  \n    \n    table#wpdtSimpleTable-21{\n    width: 800px;\n    }\n\ntable#wpdtSimpleTable-22{\n    width: 600px;\n    }  \n\ntable#wpdtSimpleTable-23{\n    width: 600px;\n    } \n\ntable#wpdtSimpleTable-24{\n    width: 600px;\n    } \n\ntable#wpdtSimpleTable-30{\n    width: 750px;\n    } \n    \ntable#wpdtSimpleTable-26{\n    width: 600px;\n    } \n\ntable#wpdtSimpleTable-31{\n    width: 800px;\n    } \n\ntable#wpdtSimpleTable-32{\n    width: 800px;\n    } \n    \ntable#wpdtSimpleTable-33{\n    width: 950px;\n    }\ntable#wpdtSimpleTable-34{\n    width: 800px;\n    }\ntable#wpdtSimpleTable-35{\n    width: 800px;\n    }\ntable#wpdtSimpleTable-36{\n    width: 700px;\n    }\ntable#wpdtSimpleTable-46{\n    width: 600px;\n    }\ntable#wpdtSimpleTable-45{\n    width: 700px;\n    }.wpdt-bc-535776 { background-color: #535776 !important;}\n.wpdt-tc-F7F7F7 { color: #F7F7F7 !important;}\n.wpdt-tc-FFFFFF { color: #FFFFFF !important;}\n.wpdt-bc-F2F2F2 { background-color: #F2F2F2 !important;}\n.wpdt-bc-D7D7D7 { background-color: #D7D7D7 !important;}\n.wpdt-tc-000000 { color: #000000 !important;}\n<\/style>\n<style>\n\/* th background color *\/\n.wpdt-c.wpDataTablesWrapper table.wpdtSimpleTable.bt[data-has-header='1'] td.wpdt-header-classes,\n.wpdt-c.wpDataTablesWrapper table.wpdtSimpleTable thead th,\n.wpdt-c .wpDataTablesWrapper table.wpDataTable thead th,\n.wpdt-c .wpDataTablesWrapper table.wpDataTable thead th.sorting {\n\tbackground-color: #535776 !important;\n    background-image: none !important;\n}\n\n\/* td inner border color *\/\n.wpdt-c.wpDataTablesWrapper table.wpDataTable.wpdtSimpleTable td,\n.wpdt-c .wpDataTablesWrapper table.wpDataTable td {\n\tborder-color: #FFFFFF !important;\n}\n    \/* odd rows background color *\/\n.wpdt-c.wpDataTablesWrapper table.wpdtSimpleTable tr.odd td,\n.wpdt-c .wpDataTablesWrapper table.wpDataTable tr.odd td {\n\tbackground-color: #F2F2F2 !important;\n}\n\/* even rows background color *\/\n.wpdt-c.wpDataTablesWrapper table.wpdtSimpleTable tr.even td,\n.wpdt-c .wpDataTablesWrapper table.wpDataTable tr.even td,\n.wpdt-c .wpDataTablesWrapper table.has-columns-hidden tr.row-detail > td {\n\tbackground-color: #D7D7D7 !important;\n}\n\/* table font size *\/\n.wpdt-c.wpDataTablesWrapper table.wpdtSimpleTable,\n.wpdt-c .wpDataTablesWrapper table.wpDataTable {\n    font-size:16px !important;\n}\n \n<\/style>\n\n<p>Fideres also analyzed defendants\u2019 challenges to price impact. In the wake of the <em>Goldman<\/em> Supreme Court ruling, defendants increasingly provided detailed price impact analysis both at the front-end and at the back-end. Among defendants who filed an opposition to class certification in the year prior to the Supreme Court <em>Goldman<\/em> ruling, our preliminary analysis suggests that 22% relied on an expert witness to rebut price impact. This fraction more than doubled to 47% in the roughly two years between the June 21, 2021 Supreme Court ruling and the second circuit\u2019s August 10, 2023 ruling. And in the four months following the second circuit ruling, 80% of defendants relied on an expert to challenge price impact.\u00a0 <span class=\"ui-provider ed bnr bns bnt bnu bnv bnw bnx bny bnz boa bob boc bod boe bof bog boh boi boj bok bol bom bon boo bop boq bor bos bot bou bov bow box boy\" dir=\"ltr\">See Figure 2 and the table below.\u00a0 <\/span>Together, these findings suggest defendants are spending considerably more resources challenging price impact at the class certification state following <em>Goldman<\/em>.<\/p>\n<p><img decoding=\"async\" loading=\"lazy\" class=\"aligncenter wp-image-38100 size-full\" src=\"https:\/\/fideres.com\/wp-content\/uploads\/2023\/12\/Figure-2.png\" alt=\"\" width=\"2840\" height=\"1337\" srcset=\"https:\/\/fideres.com\/wp-content\/uploads\/2023\/12\/Figure-2.png 2840w, https:\/\/fideres.com\/wp-content\/uploads\/2023\/12\/Figure-2-300x141.png 300w, https:\/\/fideres.com\/wp-content\/uploads\/2023\/12\/Figure-2-1024x482.png 1024w, https:\/\/fideres.com\/wp-content\/uploads\/2023\/12\/Figure-2-768x362.png 768w, https:\/\/fideres.com\/wp-content\/uploads\/2023\/12\/Figure-2-1536x723.png 1536w, https:\/\/fideres.com\/wp-content\/uploads\/2023\/12\/Figure-2-2048x964.png 2048w\" sizes=\"(max-width: 2840px) 100vw, 2840px\" \/><\/p>\n<p style=\"text-align: center;\"><span style=\"font-family: proxima-nova-light; font-size: 8pt;\"><em>Note: The first bar reflects 10b-5 cases where defendants filed an opposition to class certification in the year prior to the June 21, 2021 Supreme Court Goldman ruling. The second bar reflects cases where defendants filed an opposition to class certification between June 21, 2021 and December 1, 2023.<\/em><\/span><\/p>\n<p style=\"text-align: left;\">\n<div class=\"wpdt-c row wpDataTableContainerSimpleTable wpDataTables wpDataTablesWrapper\n\"\n    >\n        <table id=\"wpdtSimpleTable-56\"\n           style=\"border-collapse:collapse;\n                   border-spacing:0px;\"\n           class=\"wpdtSimpleTable wpDataTable\"\n           data-column=\"4\"\n           data-rows=\"6\"\n           data-wpID=\"56\"\n           data-responsive=\"0\"\n           data-has-header=\"0\">\n\n                    <tbody>        <tr class=\"wpdt-cell-row \" >\n                            <td class=\"wpdt-cell  wpdt-empty-cell \"\n                                    data-cell-id=\"A1\"\n                data-col-index=\"0\"\n                data-row-index=\"0\"\n                style=\" width:28.74251497006%;                padding:10px;\n                \"\n                >\n                                                <\/td>\n                                            <td class=\"wpdt-cell  wpdt-empty-cell \"\n                                    data-cell-id=\"B1\"\n                data-col-index=\"1\"\n                data-row-index=\"0\"\n                style=\" width:18.11377245509%;                padding:10px;\n                \"\n                >\n                                                <\/td>\n                                            <td class=\"wpdt-cell wpdt-bc-535776 wpdt-tc-FFFFFF wpdt-merged-cell \"\n                 colspan=\"2\"  rowspan=\"1\"                 data-cell-id=\"C1\"\n                data-col-index=\"2\"\n                data-row-index=\"0\"\n                style=\" width:43.712574850299%;                padding:10px;\n                \"\n                >\n                                Fraction of Defendant Opposition Filings                <\/td>\n                                                    <\/tr>\n                            <tr class=\"wpdt-cell-row \" >\n                            <td class=\"wpdt-cell wpdt-bc-535776 wpdt-tc-FFFFFF\"\n                                    data-cell-id=\"A2\"\n                data-col-index=\"0\"\n                data-row-index=\"1\"\n                style=\"                padding:10px;\n                \"\n                >\n                                Filing Date for Defendants' Opposition to Class Certification                <\/td>\n                                            <td class=\"wpdt-cell wpdt-bc-535776 wpdt-tc-FFFFFF\"\n                                    data-cell-id=\"B2\"\n                data-col-index=\"1\"\n                data-row-index=\"1\"\n                style=\"                padding:10px;\n                \"\n                >\n                                Number of Defendant Oppositions to Class Certification                <\/td>\n                                            <td class=\"wpdt-cell wpdt-bc-535776 wpdt-tc-FFFFFF\"\n                                    data-cell-id=\"C2\"\n                data-col-index=\"2\"\n                data-row-index=\"1\"\n                style=\"                padding:10px;\n                \"\n                >\n                                Challenging Price Impact                <\/td>\n                                            <td class=\"wpdt-cell wpdt-bc-535776 wpdt-tc-FFFFFF\"\n                                    data-cell-id=\"D2\"\n                data-col-index=\"3\"\n                data-row-index=\"1\"\n                style=\"                padding:10px;\n                \"\n                >\n                                Challenging Price Impact, Citing Expert Report                <\/td>\n                                        <\/tr>\n                            <tr class=\"wpdt-cell-row \" >\n                            <td class=\"wpdt-cell wpdt-bc-D7D7D7\"\n                                    data-cell-id=\"A3\"\n                data-col-index=\"0\"\n                data-row-index=\"2\"\n                style=\"                padding:10px;\n                \"\n                >\n                                June 21, 2020 - June 20, 2021 (before Supreme Court ruling)                <\/td>\n                                            <td class=\"wpdt-cell wpdt-bc-D7D7D7\"\n                                    data-cell-id=\"B3\"\n                data-col-index=\"1\"\n                data-row-index=\"2\"\n                style=\"                padding:10px;\n                \"\n                >\n                                9                <\/td>\n                                            <td class=\"wpdt-cell wpdt-bc-D7D7D7\"\n                                    data-cell-id=\"C3\"\n                data-col-index=\"2\"\n                data-row-index=\"2\"\n                style=\"                padding:10px;\n                \"\n                >\n                                22%                <\/td>\n                                            <td class=\"wpdt-cell wpdt-bc-D7D7D7\"\n                                    data-cell-id=\"D3\"\n                data-col-index=\"3\"\n                data-row-index=\"2\"\n                style=\"                padding:10px;\n                \"\n                >\n                                22%                <\/td>\n                                        <\/tr>\n                            <tr class=\"wpdt-cell-row \" >\n                            <td class=\"wpdt-cell wpdt-bc-F2F2F2\"\n                                    data-cell-id=\"A4\"\n                data-col-index=\"0\"\n                data-row-index=\"3\"\n                style=\"                padding:10px;\n                \"\n                >\n                                June 21, 2021 - August 9, 2023 (between Supreme Court and second circuit rulings)                <\/td>\n                                            <td class=\"wpdt-cell wpdt-bc-F2F2F2\"\n                                    data-cell-id=\"B4\"\n                data-col-index=\"1\"\n                data-row-index=\"3\"\n                style=\"                padding:10px;\n                \"\n                >\n                                57                <\/td>\n                                            <td class=\"wpdt-cell wpdt-bc-F2F2F2\"\n                                    data-cell-id=\"C4\"\n                data-col-index=\"2\"\n                data-row-index=\"3\"\n                style=\"                padding:10px;\n                \"\n                >\n                                51%                <\/td>\n                                            <td class=\"wpdt-cell wpdt-bc-F2F2F2\"\n                                    data-cell-id=\"D4\"\n                data-col-index=\"3\"\n                data-row-index=\"3\"\n                style=\"                padding:10px;\n                \"\n                >\n                                47%                <\/td>\n                                        <\/tr>\n                            <tr class=\"wpdt-cell-row \" >\n                            <td class=\"wpdt-cell wpdt-bc-D7D7D7\"\n                                    data-cell-id=\"A5\"\n                data-col-index=\"0\"\n                data-row-index=\"4\"\n                style=\"                padding:10px;\n                \"\n                >\n                                August 10, 2023 - December 1, 2023 (after second circuit ruling)                <\/td>\n                                            <td class=\"wpdt-cell wpdt-bc-D7D7D7\"\n                                    data-cell-id=\"B5\"\n                data-col-index=\"1\"\n                data-row-index=\"4\"\n                style=\"                padding:10px;\n                \"\n                >\n                                5                <\/td>\n                                            <td class=\"wpdt-cell wpdt-bc-D7D7D7\"\n                                    data-cell-id=\"C5\"\n                data-col-index=\"2\"\n                data-row-index=\"4\"\n                style=\"                padding:10px;\n                \"\n                >\n                                100%                <\/td>\n                                            <td class=\"wpdt-cell wpdt-bc-D7D7D7\"\n                                    data-cell-id=\"D5\"\n                data-col-index=\"3\"\n                data-row-index=\"4\"\n                style=\"                padding:10px;\n                \"\n                >\n                                80%                <\/td>\n                                        <\/tr>\n                            <tr class=\"wpdt-cell-row \" >\n                            <td class=\"wpdt-cell wpdt-bc-F2F2F2\"\n                                    data-cell-id=\"A6\"\n                data-col-index=\"0\"\n                data-row-index=\"5\"\n                style=\"                padding:10px;\n                \"\n                >\n                                June 21, 2021 - December 1, 2023 (full period after Supreme Court ruling)                <\/td>\n                                            <td class=\"wpdt-cell wpdt-bc-F2F2F2\"\n                                    data-cell-id=\"B6\"\n                data-col-index=\"1\"\n                data-row-index=\"5\"\n                style=\"                padding:10px;\n                \"\n                >\n                                62                <\/td>\n                                            <td class=\"wpdt-cell wpdt-bc-F2F2F2\"\n                                    data-cell-id=\"C6\"\n                data-col-index=\"2\"\n                data-row-index=\"5\"\n                style=\"                padding:10px;\n                \"\n                >\n                                55%                <\/td>\n                                            <td class=\"wpdt-cell wpdt-bc-F2F2F2\"\n                                    data-cell-id=\"D6\"\n                data-col-index=\"3\"\n                data-row-index=\"5\"\n                style=\"                padding:10px;\n                \"\n                >\n                                50%                <\/td>\n                                        <\/tr>\n                    <\/table>\n<\/div><style id='wpdt-custom-style-56'>\nh2.wpdt-c {\n    display: none;\n}\n.wpdt-c.wpDataTableContainerSimpleTable .wpdtSimpleTable.wpDataTable {\n    font-family: 'proxima-nova-light';\n}\n.wpdt-c .wpdt-bold {\n    font-weight: 600 !important;\n}\n\n@media only screen and (min-width: 992px)  {\n    table#wpdtSimpleTable-7 {\n    width: 600px;\n}\n    table#wpdtSimpleTable- {\n    width: 600px;\n} \n    table#wpdtSimpleTable- {\n    width: 600px;\n    }\n}\n table#wpdtSimpleTable-12 {\n    width: 600px;\n    } \n\n table#wpdtSimpleTable-13 {\n    width: 800px;\n    }   \n\n table#wpdtSimpleTable-14 {\n    width: 600px;\n    }   \n    \n table#wpdtSimpleTable-8 {\n    width: 600px;\n    }   \n\n table#wpdtSimpleTable-19 {\n    width: 600px;\n    }   \n\ntable#wpdtSimpleTable-20 {\n    width: 600px;\n    }  \n    \n    table#wpdtSimpleTable-21{\n    width: 800px;\n    }\n\ntable#wpdtSimpleTable-22{\n    width: 600px;\n    }  \n\ntable#wpdtSimpleTable-23{\n    width: 600px;\n    } \n\ntable#wpdtSimpleTable-24{\n    width: 600px;\n    } \n\ntable#wpdtSimpleTable-30{\n    width: 750px;\n    } \n    \ntable#wpdtSimpleTable-26{\n    width: 600px;\n    } \n\ntable#wpdtSimpleTable-31{\n    width: 800px;\n    } \n\ntable#wpdtSimpleTable-32{\n    width: 800px;\n    } \n    \ntable#wpdtSimpleTable-33{\n    width: 950px;\n    }\ntable#wpdtSimpleTable-34{\n    width: 800px;\n    }\ntable#wpdtSimpleTable-35{\n    width: 800px;\n    }\ntable#wpdtSimpleTable-36{\n    width: 700px;\n    }\ntable#wpdtSimpleTable-46{\n    width: 600px;\n    }\ntable#wpdtSimpleTable-45{\n    width: 700px;\n    }.wpdt-bc-535776 { background-color: #535776 !important;}\n.wpdt-tc-FFFFFF { color: #FFFFFF !important;}\n.wpdt-bc-D7D7D7 { background-color: #D7D7D7 !important;}\n.wpdt-bc-F2F2F2 { background-color: #F2F2F2 !important;}\n<\/style>\n<style>\n\/* th background color *\/\n.wpdt-c.wpDataTablesWrapper table.wpdtSimpleTable.bt[data-has-header='1'] td.wpdt-header-classes,\n.wpdt-c.wpDataTablesWrapper table.wpdtSimpleTable thead th,\n.wpdt-c .wpDataTablesWrapper table.wpDataTable thead th,\n.wpdt-c .wpDataTablesWrapper table.wpDataTable thead th.sorting {\n\tbackground-color: #535776 !important;\n    background-image: none !important;\n}\n\n\/* td inner border color *\/\n.wpdt-c.wpDataTablesWrapper table.wpDataTable.wpdtSimpleTable td,\n.wpdt-c .wpDataTablesWrapper table.wpDataTable td {\n\tborder-color: #FFFFFF !important;\n}\n    \/* odd rows background color *\/\n.wpdt-c.wpDataTablesWrapper table.wpdtSimpleTable tr.odd td,\n.wpdt-c .wpDataTablesWrapper table.wpDataTable tr.odd td {\n\tbackground-color: #F2F2F2 !important;\n}\n\/* even rows background color *\/\n.wpdt-c.wpDataTablesWrapper table.wpdtSimpleTable tr.even td,\n.wpdt-c .wpDataTablesWrapper table.wpDataTable tr.even td,\n.wpdt-c .wpDataTablesWrapper table.has-columns-hidden tr.row-detail > td {\n\tbackground-color: #D7D7D7 !important;\n}\n\/* table font size *\/\n.wpdt-c.wpDataTablesWrapper table.wpdtSimpleTable,\n.wpdt-c .wpDataTablesWrapper table.wpDataTable {\n    font-size:16px !important;\n}\n \n<\/style>\n<\/p>\n<p>At the heart of the <em>Goldman<\/em> class certification challenge was an alleged mismatch in the genericness of alleged misrepresentations and their corresponding corrective disclosures. However, defendants tend to cite to <em>Goldman<\/em> in a much broader context. In fact, our preliminary analysis suggest that only 21% of defendants challenging price impact argued that the alleged misrepresentations were overly generic relative to their corrective disclosures. Commonly, for example, defendants do not explicitly reference any mismatch and instead cite the Supreme Court\u2019s recommendation that courts \u201cshould be open to all probative evidence\u201d on price impact, \u201cregardless whether the evidence is also relevant to a merits question like materiality.\u201d<span style=\"font-family: proxima-nova-light;\"><sup>11<\/sup><\/span> Other times, defendants claim a mismatch along other dimensions than genericness.<span style=\"font-family: proxima-nova-light;\"><sup>12<\/sup><\/span><\/p>\n<h2>Conclusion<\/h2>\n<p>Fideres\u2019 preliminary findings suggest defendants are markedly more likely to challenge price impact after the Supreme Court\u2019s 2021 <em>Goldman<\/em> ruling. Defendants further appear to spend considerably more resources on their price impact rebuttal, reflected, e.g., by their increased reliance on expert witness reports following <em>Goldman<\/em>.<\/p>\n<p>A future version of this article will analyze the impact of the second circuit ruling further and include an analysis of court orders on class certification.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Key Points Fideres has analyzed a sample of 10b-5 filings to determine the impact of the Supreme Court\u2019s 2021 Goldman\u00a0ruling. We find that, since the ruling, the percentage of 10b-5 cases where defendants have challenged price impact has jumped from 17% to 44%. Defendants further appear to spend more resources on price impact rebuttal following [&hellip;]<\/p>\n","protected":false},"author":17,"featured_media":38058,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[82],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v20.8 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>After Goldman - Trouble Getting to Class - Fideres<\/title>\n<meta name=\"description\" content=\"Following Goldman, Defendants have doubled their propensity to challenge price impact, and to rely on expert witnesses, at the class certification stage.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/fideres.com\/after-goldman-trouble-getting-to-class\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"After Goldman - Trouble Getting to Class - Fideres\" \/>\n<meta property=\"og:description\" content=\"Following Goldman, Defendants have doubled their propensity to challenge price impact, and to rely on expert witnesses, at the class certification stage.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/fideres.com\/after-goldman-trouble-getting-to-class\/\" \/>\n<meta property=\"og:site_name\" content=\"Fideres\" \/>\n<meta property=\"article:published_time\" content=\"2023-12-18T17:39:33+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2024-02-05T10:48:19+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/fideres.com\/wp-content\/uploads\/2023\/12\/iStock-1713357282-scaled.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"2560\" \/>\n\t<meta property=\"og:image:height\" content=\"1707\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Steffen Hennig\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@fideres\" \/>\n<meta name=\"twitter:site\" content=\"@fideres\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Steffen Hennig\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"6 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/fideres.com\/after-goldman-trouble-getting-to-class\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/fideres.com\/after-goldman-trouble-getting-to-class\/\"},\"author\":{\"name\":\"Steffen Hennig\",\"@id\":\"https:\/\/fideres.com\/#\/schema\/person\/2fc4096a052fe9289af8f50ad2713079\"},\"headline\":\"After Goldman &#8211; 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