The US Supreme Court heard oral argument yesterday in Erica P. John Fund, Inc. v. Halliburton Co.  A great summary of the case and it’s importance to the insurance industry comes from an article written by the law firm of Jones Day:

The outcome of the case will have a significant impact on all companies, executives, and board members, who constantly face the threat of securities litigation. To prevail in a securities fraud action, an investor has to prove that he or she relied on a misrepresentation or omission. Under the fraud-on-the-market doctrine, investors can seek to satisfy the reliance requirement by claiming that, in an efficient market, the price of a stock reflects the market’s absorption of all available information about the company. Therefore, an investor who bought stock at a price that was inflated by the misrepresentation or omission can claim that she relied on the misrepresentation or omission, even though she was not personally aware of it.

You can read a transcript of the oral argument here on the US Supreme Court Website.

You can read a history of the case and how it ended up in front of the US Supreme Court here on the Cornell University Law School website.

There is also a great piece about the case here on the Practising Law Institute website, including some discussion towards the end of briefs submitted by amicus curiae on both sides of the issue.