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Basic Inc. et al. v. Levinson et al.

  1. How does the fraud-on-the-market theory relate to reliance? Why is this important for class certification?
  2. According to the fraud-on-the-market theory, who relies on what? Why do they trade?
  3. What social good, if any, do private securities fraud class actions generate? In other words, what is the policy justification, if any, for allowing this costly litigation to proceed?
  4. In particular, how does the measure of damages relate to the social harm (as opposed to the private harm suffered by a subset of traders)?