Supreme Court Holds That Securities Fraud Plaintiffs Do Not Have to Prove Materiality to Certify a Class

The Supreme Court issued a much-anticipated decision today in Amgen Inc. v. Connecticut Retirement Plans and Trust Funds, No. 11-1085, 568 U.S. __ (2013), affirming the Ninth Circuit and holding that securities class action plaintiffs do not have to prove that alleged misrepresentations or omissions were material at the class certification stage. The ruling has substantial implications for future securities fraud class actions, where materiality could otherwise have proven a significant hurdle for plaintiffs.

The case involved purportedly fraudulent statements concerning “the safety, efficacy, and marketing of two of [Amgen’s] flagship drugs” alleged to have artificially inflated its stock price. Amgen argued that the market was well aware of the truth during the class period based on other public information, thus rendering the allegedly fraudulent statements immaterial.

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