The ''Fraud-on-the-Market'' Presumption of Reliance Revisited: Supreme Court Declines to Require Proof of Materiality at Class Certification Stage

On February 27, 2013, the Supreme Court issued its opinion in Amgen Inc. v. Connecticut Retirement Plans and Trust Funds (Amgen). At issue before the Court was whether plaintiffs invoking the fraud-on-the-market presumption of reliance must prove materiality before obtaining class certification in federal securities class actions. While the Court foreclosed direct challenges to the element of materiality at the class certification stage, the Courts opinion is noteworthy because it expressly left open the possibility that the Court would reconsider the fraud-on-the-market presumption of reliance altogether. If the presumption is revisited, it could dramatically change the landscape of federal securities class actions.

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