|by Richard Wolf, USA TODAY|
At least four conservative justices have made clear their desire to modify or overturn a 1988 decision that permitted class-action lawsuits based on investors' belief in market prices that were skewed by misrepresentations or omissions.
Companies such as <location idsrc=”xmltag.org” value=”LU/us.tx.houstn”>Houston-based energy giant
On the other side, trade groups representing investors say reliance on market prices is essential, because most investors use market indexes and lack the time and expertise to parse corporate financial statements.
That's precisely what Justices
Those doubts are based on the idea that market prices are not always accurate, up-to-date indicators of a stock's value. As the
Those four conservative justices remain one vote short of a majority, however, making Chief Justice
Lawyers for the
"If this court were to eliminate the fraud-on-the-market presumption, most defrauded investors would be left without any legal recourse from fraud," their brief says. "That is particularly true for individual investors, who simply do not have the time to review financial statements,
The case includes some interesting sidelights:
• The nine-member court's 1988 decision came on an unusual 4-2 vote. Three justices recused themselves, including Scalia and Kennedy — the latter because he had joined the court after oral argument in the case.
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