On August 10, 2023, the Second Circuit Court of Appeals reversed the S.D.N.Y. class certification order in Goldman Sachs effectively decertifying the securities class action and cementing the directives of the Supreme Court pertaining to price impact evidentiary requirements to rebut the presumptions of reliance. The ruling empowers district court Judges with data-driven price impact evidence to determine whether a causal link exists between the statements investor plaintiffs allege defendants misrepresented and the resulting decline in stock price from allegedly related corrective disclosures. The webinar will provide the audience with a basic overview of Goldman’s price impact standards and how specialized data science can support defendant’s in motion to dismiss and class certification contests to increase the probability of rebutting the presumptions of reliance to limit high severity losses on open securities class actions. Attendees will learn what stock price impact means in the context of class certification of Rule 10b-5 claims and gain a better understanding of why this decision is so important for defendants and insurance carriers, particularly in an event-driven ecosystem.

A speaker from this webinar, Nessim Mezrahi, provided some commentary on this session, sharing key takeaways in the Professional Liability field. See the remarks below.

Why is this topic important for professional liability practitioners?

The Goldman Sachs decision in the 2nd Circuit is the culmination of a decade-long class certification battle that led to class decertification effectively eliminating billions of dollars in potential settlement losses for the insured and participating D&O insurance carriers.

The ruling in Goldman Sachs empowers the Federal Judiciary with all record evidence relevant to price impact  to assess the link between back-end price drop and front-end misrepresentation to effectively test whether plaintiffs alleged misleading generic and potentially generalized statements match the alleged revelation of truth that allegedly prompted a decline in stock price.   

The ruling in Goldman Sachs delivers greater return on investment on a legal defense that applies a price impact strategy to limit accumulated loss severity as evidenced by the recent ruling in ExxonMobil in the 5th Circuit. 

Takeaway:  Practitioners stand to make a notable impact on limiting potential settlement losses on active securities class actions by learning how to apply and interpret the results of event study analyses to evaluate the validity of plaintiffs securities claims that allege violations of Rule 10b-5 and the Exchange Act by Directors and Officers of U.S. public companies.

What are the top takeaways from this webinar discussion? 

A strong price impact defense that comports with the Supreme Courts Mismatch Framework has a greater likelihood of rebutting the presumption of reliance than a Market Inefficiency defense on fraud-on-the-market claims as evidenced by the result in Goldman Sachs in the 2nd Circuit.

A price impact defense has a greater return on investment even if the Court deems the market for the Defendants common stock to be informationally efficient and the class is certified.  The Court in ExxonMobil in the 5th Circuit cut Plaintiffs alleged Class Period by ~76% and disqualified six (6) alleged corrective disclosures that exhibited an absence of price impact.  The result was a remarkable reduction in potential settlement losses based on price impact defenses afforded by the ruling in Goldman Sachs.

A price impact defense requires the application of event study analysis to evaluate stock price reaction of the alleged misstatements (front-end) and the allegedly related corrective disclosures (back-end).

Takeaway:  Some established D&O insurance carriers now offer event study cost endorsement on event study analyses to support a robust price impact defense.

If someone is interested in learning more about this topic are there other resources you would recommend for more information? 

SAR publishes the quarterly SCA Rule 10b-5 Exposure Report that identifies and quantifies the impact of non-conforming stock drops based on claim-specific event study results according to investor plaintiffs preliminary pleadings to assess securities class action loss severity more accurately.  Practitioners may access the reports and other thought leadership pieces on price impact defenses, here: https://www.sarlit.com/thought-leadership

Don’t miss out on learning more about this topic. Login to the PLUS website and listen to the recording.

PLUS webinars and on-demand recordings are only available to PLUS members so if you haven’t become a member yet you can do so at no-cost.

Meet the Speakers

Gregory Larsson, AIG
Nessim Mezrahi, SAR

Nessim Mezrahi is focused on the growth of SAR by deploying innovative public company risk management data analytics solutions for reinsurers, insurance carriers, specialized executive risk brokers, and counsel. As a mission-driven chief executive, Mr. Mezrahi is dedicated to implementing the court approved event study methodology in the professional liability insurance industry to assess the risk and exposure of securities litigation more effectively and enhance data-driven decision-making in public company D&O underwriting and complex securities claim management.

Mr. Mezrahis research and analysis on private securities-fraud litigation has been cited by leading defense trial attorneys, acclaimed legal scholars, the SEC, and research papers published by global insurance companies. Mr. Mezrahi has written extensively on securities class actions and is a regular contributor to Law360 and The D&O Diary.

Since 2007, Mr. Mezrahi has applied the event study methodology to estimate economic damages in securities class actions that allege violations of the federal securities laws under Section 11, Section 12(a)(2), and Section 15 of the Securities Act of 1933, and under Section 10(b) and 20(a) of the Securities Exchange Act of 1934 and SEC Rule 10b-5 promulgated thereunder. He has extensive experience with analyses of stock price impact and has devised court-approved estimates of aggregate shareholder damages with corresponding approved plans of allocation on several landmark securities class actions that stemmed from the Great Recession of 2008.
Susan Muck, Wilmer Hale

Susan Muck focuses her practice on shareholder class actions, derivative suits, and internal and US Securities and Exchange Commission (SEC) investigations. She also regularly advises boards and management on disclosure and accounting issues, cybersecurity, the Foreign Corrupt Practices Act (FCPA), whistleblower investigations, and other high-profile governance matters. Her practice spans a wide range of industries, including life science, software, social media, cloud computing, energy, financial services and retail. Ms. Muck has represented companies, directors and officers in a wide variety of SEC, US Department of Justice and whistleblower investigations. She has also developed FCPA, UK Bribery Act, and general ethics and compliance programs for dozens of public and private companies.

Ms. Muck has practiced in the Bay Area for more than three decades. She joined WilmerHale in 2020 after more than 15 years at another law firm, where she co-founded the securities litigation and securities enforcement practices and served as a trusted advisor to many of the regions most innovative technology and sharing-economy companies.
Walker Newell, Woodruff Sawyer
News Type


Business Line

Directors and Officers (D&O)


Professional Liability (PL) Insurance

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