Schleicher v. Wendt

Dist. Ct. did not err in certifying class action in instant section 10(b)-5 action alleging that defendants made false statements to hide true nature of financial condition of corporation that resulted in plaintiffs paying too much for stock in said corporation. Circumstances of instant case fit all requirements for class certification set forth in Basic, 485 US 224, in that subject corporation was large, publicly-traded financial-services holding company, and expert testified that market for corporation's shares was sufficiently-efficient to permit plaintiffs-investors to use fraud-on-the-market doctrine as replacement for person-specific proof reliance and causation. Ct. further rejected defendants' contention that: (1) prior to certification of class, Dist. Ct. must determine that contested statements actually caused material changes in stock price; and (2) instant proposed class could not include short sellers of corporate stock who correctly anticipated that stock price would decline.