Stock Price Gain — Not Necessarily Plaintiff’s Loss

Law360, New York (October 26, 2012, 4:01 PM EDT) -- The Second Circuit’s recent decision in Acticon AG v. China North East Petroleum Holdings Ltd.[1] appears to foreclose a defendant’s ability, at the motion to dismiss stage, to use an increase in stock price following a corrective disclosure to refute a claim of economic loss, a required element for a damages claim under Section 10(b) of the Securities Exchange Act of 1934. The decision rejects reasoning previously applied by district courts, limiting the ability at the pleading stage to challenge allegations that a plaintiff has properly...
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