Skadden Discusses Second Circuit Decision Expanding Loss Causation Pleading Requirements

The Second Circuit affirmed dismissal of a securities fraud complaint, expanding loss causation pleading requirements when no immediate price decline follows corrective disclosure. Skadden attorneys Michael W. Restey Jr. and Nikita Ganesh discuss how the ruling represents a significant expansion of a lead plaintiff's burden in pleading loss causation and a court's role in evaluating such pleading.