Acticon's Impact On Post-Corrective Disclosure Damages

Law360, New York (August 24, 2012, 12:46 PM EDT) -- On Aug. 1, 2012, the Second Circuit issued Acticon AG v. China North East Petroleum Holdings Limited, holding that economic loss, which is a necessary element to maintain a private damages action under Section 10(b) of the Exchange Act, is not conclusively negated at the pleading stage where the price of a stock rebounds after declines following an alleged corrective disclosure.

Importantly, the Court of Appeals clarified that damages incurred after a corrective disclosure may be properly reduced (or eliminated) where discovery establishes that a subsequent...
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