Corporate Law

Fraud on the Market: Halliburton v. Erica P. John Fund Decided - Podcast

Corporations, Securities & Antitrust and Litigation Practice Groups Podcast
George T. Conway III July 17, 2014

On Monday, June 23, 2014 the Supreme Court issued a 9-0 decision in the highly anticipated securities fraud case Halliburton v. Erica P. John Fund. The case offered the Court an opportunity to revisit its 1988 decision in Basic v. Levinson, in which it adopted the “fraud on the market” doctrine. Fraud on the market is critical to modern securities fraud class action lawsuits -- the doctrine assumes that any misrepresentations of a security traded in an efficient market will affect that security’s market price and thus affect any shareholders trading in reliance of market price, an assumption that precludes consideration of whether potential class members actually heard and acted on fraudulent statements. The Court declined to overturn Basic; our expert discussed the reasoning and impact of the decision.

  • George T. Conway III, Partner, Wachtell, Lipton, Rosen & Katz

Are Major Changes in Compelled Speech Coming? Conflict Minerals, Meat Labeling, and More - Podcast

Free Speech & Election Law Practice Group Podcast
Megan L. Brown, Erik S. Jaffe May 19, 2014

DC Circuit Court

Corporations’ First Amendment rights have been litigated frequently. One area of interest in the Circuit Courts is compelled corporate speech—sometimes controversial disclosures, messages and information mandated by the government. As such obligations expand, businesses have brought First Amendment challenges, forcing courts to evaluate what standard the government must meet before it can require private parties to engage in speech.

The U.S. Court of Appeals for the D.C. Circuit recently issued two conflicting decisions on compelled corporate speech. In National Association of Manufacturers v. SEC, the D.C. Circuit found the so-called “conflict minerals” disclosure rule violated the First Amendment, while in American Meat Institute v. Dep’t of Agriculture, a panel sustained a country of origin label requirement. The panels took different approaches to the Supreme Court’s seminal compelled disclosure case, Zauderer v. Office of Disciplinary Counsel, which recognized a narrow opening for compulsions of purely factual and uncontroversial information to prevent consumer deception in advertising. At stake now is whether Zauderer remains a narrow exception to traditional First Amendment review of compelled speech, or whether the government only has to satisfy rational basis review to promote various interests through informational obligations on the private sector.

Notably, the panel in American Meat Institute itself suggested that the full court hear the case, which is set to be heard en banc by the D.C. Circuit on May 19. The D.C. Circuit will be poised to decide how government speech mandates are to be judged under the First Amendment. Its decision could open the door to more disclosure and informational obligations.


  • Megan L. Brown, Partner, Wiley Rein LLP
  • Erik S. Jaffe, Sole Practitioner, Erik S. Jaffe, PC