Atanu Saha and I have just released a new paper entitled The Loss Causation Requirement for Rule 10b-5 Causes-of-Action: The Implications of Dura Pharmaceuticals v. Broudo.  The article explores the broad range of important issues concerning the loss causation requirement raised by the Supreme Court in the Dura decision.  The Abstract explains:

In order to have recoverable damages in a Rule 10b-5 action, plaintiffs must establish loss causation, i.e., that the actionable misconduct was the cause of economic losses to the plaintiffs.  The requirement of loss causation has come to the fore as the result of the Supreme Court’s landmark decision in Dura Pharmaceuticals v. Broudo.  We address in this paper a number of loss causation issues in light of the Dura decision, including issues surrounding the proper use of event studies to establish recoverable damages, the requirement that there be a corrective disclosure, what types of disclosure should count as a corrective disclosure, post-corrective disclosure stock price movements, the distinction between the class period and the damage period, collateral damage caused by a corrective disclosure, and forward-casting estimates of recoverable damages.

The full Article is available for download here.