2nd Circ. Offers Clarity on Shareholder Class Actions

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January 17, 2018

The Second Circuit ruled yesterday that a judge applied the wrong standard of proof when certifying a shareholder class action, which could help clarify the standard needed to “rebut allegations that a company’s misstatements directly impacted its stock price,” writes Law360.

A panel of judges ruled in favor of Goldman Sachs, saying the company should get another chance to challenge the allegations that it set assets up to fail so it can bet against them. The Circuit’s decision instructed lower courts to offer a preponderance of the evidence standard rather than conclusive evidence.