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Supreme Court rules on securities fraud pleading requirements

[JURIST] The US Supreme Court [official website] on Tuesday ruled that plaintiffs bringing securities fraud claims cannot establish economic loss necessary for such claims by showing that stock prices were inflated at the time of purchase. In Dura Pharmaceuticals, Inc. v. Broudo [Duke Law School case backgrounder], 03-932, the Court overturned a Ninth Circuit decision that plaintiffs could simply prove the stock price was inflated due to misrepresentations. In the class action case, the plaintiffs had claimed securities fraud by Dura Pharmaceuticals, which they alleged misrepresented pending FDA approval of an asthmatic spray device. Read the Court's unanimous opinion [PDF text], per Justice Breyer. AP has more.

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