Testing the Limits of Fraud-on-the-Market: Class Certification Orders in 2025
In a new report, Brattle economists provide a systematic examination of federal district court and appellate court orders regarding class certification in securities litigation issued in 2025, analyzing how defendants challenged predominance under Rule 23(b)(3) and how courts evaluated those arguments.
The findings show that while defendants frequently advanced similar arguments – particularly targeting price impact, market efficiency, and damages – courts did not respond uniformly. In some instances, courts engaged directly with fact-specific economic arguments; in others, they deferred those questions to the merits stage.
Looking ahead, the report highlights how evolving appellate guidance – including the Sixth Circuit’s FirstEnergy decision vacating certification, as well as recent Fourth and Fifth Circuit grants of appellate review– may shape how courts evaluate these issues at the class certification stage.
Testing the Limits of Fraud-on-the-Market: Class Certification Orders in 2025 was authored by Principals Andrew Roper, Mame Maloney, Brendan Rudolph, and Ravi Sinha, along with Associate Aidan Kutner. The full report is available below.
