On May 18, 2022, WLF asked the Second Circuit to clarify the meaning of a recent U.S. Supreme Court precedent for securities class actions. The appeal arises on remand from the Supreme Court’s 2021 decision in Goldman Sachs Group v. Arkansas Teacher Retirement System. There, the Supreme Court established a “mismatch” test to exclude from liability generic corporate statements made by virtually every public company. On remand, the district court misconstrued the “mismatch” test to require only a finding that the supposedly corrective disclosures generally “implicate” the same subject matter as the purported misrepresentations. And the district court expanded the inflation-maintenance theory by premising price impact on the effect of a disclosure differing in kind from the alleged misstatement itself. Urging reversal, WLF’s brief contends that the district court’s application of Goldman would leave defendants without the meaningful ability to defeat class certification for failure to prove price impact, thus undermining Supreme Court precedent and congressional policy aimed at limiting meritless securities class actions and coercive settlements.
WLF’s amicus brief was prepared with the pro bono assistance of Lyle Roberts, George Anhang, and William Marsh of Shearman & Sterling LLP.