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The 'Affiliated Ute' Presumption of Reliance Is No Panacea

, New York Law Journal


James K. Goldfarb and Michael V. Rella write: 'Halliburton II,' soon to be decided by the U.S. Supreme Court, has sparked speculation about the future of the "fraud on the market" presumption of reliance in private, civil federal securities fraud cases based on affirmative misrepresentations. Commentators have suggested that if the court dispatches that presumption, plaintiffs might fill the void by invoking the so-called Affiliated Ute presumption of reliance—a rebuttable presumption that arises in cases based on material omissions in breach of a duty to disclose.

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