Proving Loss Causation in Securities Fraud Cases
An article over at law.com looks at recent opinions on what is necessary to prove loss causation in an action for securities fraud. Judge Shira Scheindlin of the Southern District of New York (and author of the Zubulake v. UBS Warburg series of opinions on e-discovery) ruled in a recent case on the subject that plaintiffs must establish "both that the loss be foreseeable and that the loss be caused by the materialization of the concealed risk." If this rule sticks, plaintiffs in securities fraud cases would have the same burden on causation as plaintiffs in a standard negligence action.
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