On July 16, the New York State Bar Association’s Securities Regulation Committee held a meeting to discuss three of the recent developments in securities regulation. The first discussion focused on the Supreme Court’s June decision in Halliburton II. Halliburton Co. v. Erica P. John Fund, No. 130317 (U.S. June 23, 2014). The Supreme Court declined to overrule the fraud-on-the-market presumption of reliance in securities-fraud class actions, but held that defendants may defeat that presumption of reliance at the class certification stage by showing a lack of “price impact,” which would preclude class certification. The discussion focused on how the ruling is an important tool for defendants in securities class actions, as well as when to assert it judiciously. The second discussion summarized the current status of the proposed regulations for crowdfunding and Regulation A in the JOBS Act. The proposed crowdfunding regulations govern raising capital online while deterring fraud. The proposed Regulation A amends what are “exempted securities” under the ’33 Securities Act. Both proposals are still pending. The third discussion centered on the amended Rule 506 of Regulation D under the ’33 Act. The group discussed the Rule’s provision on general solicitation in securities offerings.
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