Loss causation. The US Court of Appeals for the Ninth Circuit held that the announcement of an investigation, by itself, does not establish loss causation in a private securities fraud lawsuit. Such an announcement only makes investors aware of a possible future disclosure of misconduct. As a result, a decline in an issuer’s share price following the disclosure of an investigation can only be attributed to market speculation, which cannot form the basis of a viable loss causation theory. (8/8/2014) Loos v. Immersion Corp. 

Corporate merger challenge reinstated. The dismissal of a stockholder class action suit challenging the fairness of a corporate merger has been vacated. The US Court of Appeals for the First Circuit found that in light of plaintiffs’ Rule 56(d) affidavit outlining its discovery needs, plaintiffs should have been allowed to conduct additional discovery. (8/6/2014) In re PHC, Inc. Shareholder Litigation.