On February 27, 2013, the U.S. Supreme Court missed an important opportunity to rein in abusive class action suits filed under federal securities laws. In a 6 to 3 ruling, the Court upheld a trial court’s decision to certify a plaintiff’s class under a fraud-on-the-market theory even though no evidence existed that the market was ever misled. In a brief filed with the Court, WLF had argued that a court should never certify a class consisting of all stock purchasers on the basis of a fraud-on-the-market theory without first providing the defendant an opportunity to show that the market was not misled. In its brief, WLF insisted that the district court’s order certifying a class is a prime example of the all-too-frequent willingness of courts to certify inappropriate and unwieldy classes in cases alleging that a corporation provided misleading information to investors. WLF will continue to look for important opportunities to help curb abusive class action suits.

Loss.