Timing losses in stock fraud

Although predicting a Supreme Court decision based on oral arguments is a risky proposition, skeptical comments made by several justices last week suggest the court is inclined to reverse a decision that lowered the bar for plaintiffs to pursue securities fraud litigation.

In hearing the case of Dura Pharmaceuticals Inc. v. Broudo last week, the justices appeared unconvinced by the plaintiff's arguments that investor losses from fraud should be calculated from the time a stock was purchased. Instead, the high court seemed prepared to uphold the standard set by other courts, which counts losses from the time the market learns a fraud has been committed. ...