United States Second Circuit

In a securities class action alleging, inter alia, that defendants violated Rule 10b-5(a) and (c) by entering into a sham $500 million reinsurance transaction designed to mislead the market and artificially increase AIG's share price, the district court's denial of plaintiffs' motion to certify a settlement class is vacated and remanded, as under Amchem Products, Inc. v. Windsor, a securities fraud class's failure to satisfy the fraud-on-the-market presumption primarily threatens class certification by creating "intractable management problems" at trial. Here, because settlement eliminates the need for a trial, a settlement class need not demonstrate that the fraud-on-the-market presumption applies to its claims in order to satisfy the predominance requirement.

Appellate Information

• Decided 08/13/2012
• Published 08/13/2012

Judges

• Lynch

Court

• United States Second Circuit

Counsel