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Option backdating statistics

As discussed below in our discussion of "Merger & Acquisition and Proxy Disclosure Litigation Trends," the exposure of corporations to M&A litigation spans a range of subject matters, with sometimes unpredictable results. based on [a] specific misrepresentation." Amgen, 133 S. In its opening brief, Halliburton contends that Basic was wrong when decided as a matter of statutory interpretation and economic theory. Grundfest, Damages and Reliance under Section 10(b) of the Exchange Act (Rock Center for Corporate Governance, Working Paper Series No. Twelve former legislators, government lawyers, and SEC officials filed an amicus brief addressing the respondent’s expected argument, namely, that Congress endorsed fraud-on-the-market when it enacted the Private Securities Litigation Reform Act of 1995 ("PSLRA") without addressing the standard for proving reliance. The former officials’ amicus brief contends that at the time of enacting the PSLRA, Congress was confronted with "competing calls to overturn, modify, or codify the Basic presumption," and that "Congress simply left the fate of that judicially-created presumption to a future Congress or this Court." Br.

As discussed in later sections of this Year-End Report, several key cases may significantly alter the securities litigation landscape and may materially impact future levels of new case filings and settlements. The academic consensus now appears to reject Basic‘s view of market efficiency, in part because investor attempts to identify undervalued stocks demonstrate widespread betting that securities markets are inefficient. As argued in an amicus brief submitted by Vivendi S.

The case that could have the greatest dampening effect on new securities class actions will be the Supreme Court’s decision in Halliburton II, in which a ruling is expected by the end of this Term in June 2014. Markets move irrespective of public information due to several factors, such as the herd mentality of investors, algorithmic trading programs, and response to media attention to information previously made public, among others. A., many investors, including sophisticated institutional investors, volatility arbitragers, and "value" investors, "do not rely on the integrity of market price" but instead rely on their own, private valuation of stock.

We highlight these and other notable developments in shareholder litigation in our 2013 Year-End Securities Litigation Update below. 13-317, at 13-23 (discussing Affiliated Ute Citizens of Utah v.

______________________________ FILING AND SETTLEMENT TRENDS A Division of Authority Remains Unresolved on the Proper Standard of Review in Appeals of Dismissals of Shareholder Derivative Actions Recent Demand Futility Decisions: Defendants Prevail in Most Cases Choosing the Battlefield: Forum Selection Bylaw Cases in Delaware Delaware Appraisal Actions: The New Frontier of Strike Suits?

See "A Shot Across the Basic Bow," in our 2013 Mid-Year Securities Litigation Update.

If, as many court observers predict, the Court in fact overturns the fraud-on-the-market theory, securities class actions as we know them may be consigned to the dust heap.

While a number of major credit crisis cases are still pending, the trend line is expected to continue: like stock option "backdating" cases, credit crisis class actions will soon be consigned to history.

That said, while credit crisis class actions are on the wane, a new generation of cases have replaced them: single-plaintiff suits by government agencies (such as the Federal Housing Finance Agency on behalf of Fannie Mae and Freddie Mac), monoline insurers (such as MBIA), and institutional and pension fund investors.

The 2013 median amount is consistent with the five year average of $9.68 million, so perhaps it signals a "return to normal" after several years of outsized credit crisis settlements. As a result, actions are settled as "routine tolls that large companies must pay" and the cost of litigation and potential damages make it economically prudent to settle and abandon meritorious defenses.

In stark contrast to median settlement amounts, the average settlement for all settled cases in 2013 was $71 million–over double the average amount in 2012 of $36 million. 13-317, at 4-7.[1] It is perhaps unsurprising, therefore, that the theory has led to confusion and inconsistent results.

Levinson establishing that theory should be overruled. Citing Amgen, the court explained that "[t]he presumption of reliance is, however, just that–a presumption. Instead, they must demonstrate that plaintiffs’ proffered proof of market efficiency falls short of the mark." Id. Defendants presented evidence that information tended to be disclosed and incorporated into the securities’ price first in Germany, when the U.