“The Supreme Court on Wednesday seemed ready to impose new limits on securities fraud suits that would make it harder for investors to band together to pursue claims that they were misled when they bought or sold securities. But the justices did not seem inclined to issue a ruling that would put an end to most such suits.”

“The new limits would be in keeping with earlier decisions from the court led by Chief Justice John G. Roberts Jr., which has made it more difficult for workers and consumers to pursue class actions. The decision in the case argued Wednesday, expected by June, seems likely to do something similar in cases brought by investors.”

“Companies facing fraud class actions prefer to address as many issues as they can before judges decide whether to certify a class. Once a class is certified, they say, the damages sought are often so enormous that the only rational calculation is to settle even if the chances of losing at trial are small.”

“‘Once you get the class certified, the case is over,’” Justice Antonin Scalia said on Wednesday.

“Several justices suggested that this phenomenon could be partly addressed through a proposal in a supporting brief filed by two law professors, which argued that plaintiffs should be required to show at an early stage “‘whether the alleged fraud affected market price.’”

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Read full New York Times article here.