573 U.S. 258 (2014)
Halliburton Co. v.
Should the Court overrule Basic's fraud-on-the-market presumption of reliance, and if not, may a securities-fraud defendant rebut that presumption at class certification with evidence that the alleged misrepresentation did not affect the stock's price?
Basic Inc. v. Levinson recognizes a rebuttable presumption of classwide reliance in Rule 10b-5 actions when the alleged misrepresentation was public, the security traded in an efficient market, and the plaintiff traded between the misrepresentation and the truth's disclosure. The presumption is rebuttable by evidence that severs the link between the misrepresentation and the price paid, including evidence of no price impact. At class certification, a defendant must be afforded an opportunity to rebut the presumption with price-impact evidence. Plaintiffs need not prove materiality or loss causation at certification (per Amgen Inc. v. Connecticut Retirement Plans and Halliburton I), but they must establish market efficiency and publicity to invoke Basic.
The Court declined to overrule Basic's fraud-on-the-market presumption and held that defendants must be allowed, at the class certification stage, to defeat the presumption with evidence that the alleged misstatements had no impact on the stock's price. The judgment was vacated and the case remanded for further proceedings consistent with this standard.
Halliburton II preserves the viability of securities class actions by reaffirming Basic's fraud-on-the-market presumption, while making class certification a more evidence-intensive stage by authorizing defendants to introduce price-impact evidence. After Halliburton II, certification fights frequently turn on dueling event studies addressing whether an alleged misstatement moved the market or maintained inflation, and courts more closely scrutinize market efficiency and the link between the statement and price. For students, the case is essential to understanding how Rule 10b-5 reliance can be proven on a classwide basis, how Rule 23(b)(3) predominance is assessed in securities cases, and how Halliburton II fits with Halliburton I and Amgen in defining what must be shown at class certification.