The stock went down when the truth was released, and the EPJ Fund lost money.
The Fund chose to recover its losses through litigation and sought class-action status to include everyone that bought Halliburton stock between June 1999 and December 2001.
Halliburton argued untold shares of stock were purchased without any particular fabrications being taken into account, and that therefore those shareholders should not be part of the lawsuit. The lower courts originally agreed, and ruled that class-action status was off-limits.
Today's decision overruled the lower courts to include those affected by the stock drop regardless of their relationship to the false information. To include every share of stock bought during that time.
Court Documents point out the decision rested on a legal principle called "loss causation", which states there must be a "causal connection between the material representation and the economic loss suffered by investors."
Today's ruling eliminates the need for loss causation in achieving class-action status and allows that accusations alone are enough to obtain class-action status for plaintiffs. This opens the door for shareholders to proceed with class-action securities-frauds suits against any publicly traded company.
Jonathan K. Youngwood, on Harvard Law's website, writing in anticipation of today's ruling would "(make) clear they will allow price impact considerations based only on plaintiff testimony".
A Federal Courts blog mentions the case could impact other now-pending cases like Wal-Mart v Dukes, but that does not yet appear to have happened.
Halliburton's stock fell immediately on news of the ruling and experts will be watching this case closely to see what type of precedents are actually being set and what they will mean to publicly traded companies.
The Erica P. John Fund v Halliburton Co. case can be found here.
This story originally appeared on Business Insider
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