Are Event Studies In Securities Litigation Reliable?

Law360, New York (May 1, 2015, 10:17 AM EDT) -- In its June 2014 opinion in the Halliburton case, the U.S. Supreme Court held that securities lawsuit defendants may introduce evidence at the class certification stage to try to show that the alleged misrepresentation on which the plaintiffs rely did not impact the defendant company's share price. To show the absence of price impact, defendants typically will rely on "event study" methodology to analyze factors affecting a company's share price. The event study methodology has a well-established academic pedigree. But in a recent paper, two authors ask the question, "Are event studies in securities litigation reliable?"...

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