12 March 2013

On 27 February 2013, the Supreme Court held plaintiffs in a Rule 10b-5 securities fraud class action for damages need not prove materiality to obtain class certification. The 6-3 decision, Amgen v Connecticut Retirement Plans and Trust Funds, No. 11-1085, resolved a circuit split and held that materiality, an essential element of a securities fraud claim, is an objective question subject to common proof across all class members, thus making class certification appropriate even if materiality is disputed. Amgen thus should make it easier for securities fraud class actions to pass the class certification stage and proceed into merits discovery, potentially increasing the settlement value of such claims, notwithstanding possible questions about the materiality of the alleged misrepresentations underlying the claims.

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