Rule 10b-5 lawsuits are front and center in the securities litigation landscape in terms of their importance and frequency, a position they have enjoyed for the last quarter of a century. The importance of Rule 10b-5 lies in the fact that it is the basic securities anti-fraud rule in the United States, potentially creating liability running from companies-and their officers and directors-to purchasers and sellers of the company’s securities on the secondary market. Given the size of the secondary markets in many large publicly traded firms, this creates potentially vast liability exposure for Rule 10b -5 defendants. Despite the fundamental importance of 10b -5 litigation, there are only a handful of articles addressing the question of how to properly calculate Rule 10b -5 damages. In practice, there is substantial incoherence, confusion, and divergent approaches on this issue.
“Forward-Casting 10b-5 Damages: A Comparison to Other Methods,” A. Saha, A. Ferrell, Journal of Corporation Law, 37(2) (2012), 365-387