Hannah Finkel v. Docutel/olivetti Corporation

FELDMAN, District Judge:

This appeal asks whether the fraud on the market theory applies in 10b-5 securities fraud suits when the securities at issue were purchased in the open market. In the limited context of this opinion, we hold that the answer is yes and, therefore, proof of reliance on specific misconduct in the purchase or sale of a security in the open market is not a requisite key to recovery. Thus, we affirm in part and reverse in part, and remand to the district court for proceedings consistent with the parameters set here.

I. BACKGROUND

Plaintiff, Hannah Finkel, brought this action…