Securities Law | Expert Legal Commentary

December 12, 2008

In re Salomon Analyst Metromedia Litig.: Rebuttable Presumption of Fraud-on-the-Market Extended to Analysts

In re: Salomon Analyst Metromedia Litigation

By Joel B. Ginsberg

In Douglas Millowitz v. Citigroup Global Markets et al (“In Re Salomon Analyst Metromedia Litigation”), 544 F.3d 474 (2nd Cir. 2008), the Second Circuit extended the fraud-on-the-market presumption of reliance, first set forth in Basic v. Levinson, 485 U.S. 224 (1988), to analyst reports. The Court also stated that defendants should be afforded the opportunity to rebut that presumption at the class certification stage in an effort to prevent certification. The opinion may make it harder to pursue class actions in some securities fraud cases.

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Companies Mentioned

Citicorp USA, Inc.

Citigroup, Inc.

Salomon Smith Barney, Inc.

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Companies Mentioned

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The following companies are mentioned in Securities Law Updates:

Securities and Exchange Commission

Harris Associates, L.P.

Citicorp USA, Inc.

Banc of America Securities LLC

Barclays Capital Inc.

Citigroup Global Markets, Inc.

The Public Employees’ Retirement System of Mississippi

Morgan Stanley & Co., Inc.

Jan Charles Finance S.A.

Park East, Inc.

CIBC World Markets Corp.

Citigroup Inc.

Metal Management, Inc.

European Metal Recycling, Ltd.

Salomon Smith Barney Inc. n.k.a. Citigroup Global Markets, Inc.

Calyon Securities (USA), Inc. f.k.a. Credit Lyonnais Securities (USA) Inc.

Salomon Smith Barney, Inc.

Calyon New York Branch (successor by operation of law to Credit Lyonnais New York Branch)

Dynex Capital Inc.

Citigroup, Inc.

JPMorgan Chase & Co.

Merit Securities Corp.

JPMorgan Securities Inc.

Teamsters Local 445 Freight Division Pension Fund

Aetna, Inc.

Scotia Capital (USA), Inc.,

Cowen & Co., LLC f.k.a. SG Cowen Securities Corp.

Societe Generale

SunTrust Bank

TD Securities (USA), Inc.

BMO Nesbitt Burns Corp. n.k.a. Harris Nesbitt Burns Corp.

Consolidated Leasing Hugoton Joint Venture #2

Buchanan Ingersoll & Rooney Professional Corporation

Consolidated Leasing Anadarko Joint Venture

W. R. Huff Asset Management Co., LLC

Guardian Capital Management

ABN AMRO Bank N.V.

Vesta Insurance Group, Inc.

Free Enterprise Fund

Banc of America, N.A.

Beckstead and Watts, LLP

Barclays Bank PLC

Torchmark Corp.

Public Company Accounting Oversight Board

BNY Capital Markets, Inc.

KPMG Peat Marwick, LLP

Deloitte & Touche LLP

Credit Lyonnais Securities (USA) Inc.

Florida State Board of Administration

Credit Suisse Securities (USA) LLC

Additional Resources

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