Proving Causation in Federal Securities Litigation Cases: Dura Pharmaceuticals, Inc. vs. Broudo
Valeriya Avdeev

Abstract
To recover damages in a private cause of action under section 10(b) of the Securities Exchange Act of 1934 and under rule 10b-5 promulgated by the Securities and Exchange Commission, a plaintiff must plead and prove causation. Specifically, plaintiff must plead and prove both transaction causation and loss causation. However, loss causation is one of the most difficult elements to prove in securities fraud cases.Because loss causation is not easily defined, its concept had proved to be quite elusive. Not surprisingly, analysis of loss causation manifested confusion and uncertainty among the federal circuit courts for years, where two distinct approaches to the concept of loss causation existed prior to the Supreme Court’s decision of Dura Pharmaceuticals, Inc. vs. Michael Broudo.JEL Codes: K20 and K22.

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