Better Markets and the Consumer Federation of America filed an amicus brief urging the U.S. Court of Appeals for the Tenth Circuit to reverse a district court’s dismissal of a market manipulation case brought against Overstock.com and several of its principals, In re: Overstock Securities Litigation, No. 21-4126 (10th Cir.)
Why It Matters. Our securities markets have proven to be remarkable engines of business growth and wealth generation, but to thrive, they depend on investor confidence in their fairness and integrity. Market manipulation schemes that artificially distort prices not only harm innocent investors but also undermine that essential confidence, ultimately threatening the vitality of the markets.
What We Said. The district court committed error, as a matter of law and as a matter of policy when it ruled that false statements or other forms of deception are necessary elements of a claim for market manipulation under the Securities Exchange Act. If not reversed, these investors will almost certainly be left without any remedy for their losses, and over the long-term, market manipulators will be able to fashion schemes that skirt the law but nevertheless wreak havoc in the markets and among investors.
Bottom Line. Our securities markets are already viewed as unfair and rigged in many ways, and a ruling that immunizes a broad swath of market manipulation schemes is the last thing that investors or the markets really need. That’s why we urged the Tenth Circuit to reverse the district court and allow the claims to be heard.
See the full amicus brief here or click the button below. The press release is here.
