WASHINGTON — The US Supreme Court gave the green light Monday to a group seeking to bring a class-action lawsuit against US oil services firm Halliburton for alleged fraud.
The nine judges unanimously decided that the plaintiffs, a group of investors, do not need to prove a direct relationship between Halliburton’s alleged fraudulent statements and the investors’ financial losses in order to pursue the lawsuit.
Halliburton is accused of making a series of false statements about its business dealings that artificially inflated its stock price.
Afterward, Halliburton disclosed corrections that then caused stock prices to drop at the loss of investors.
The suit is on behalf of all investors who purchased Halliburton stock between June 3, 1999 and December 7, 2001.
Former US Vice President Dick Cheney was chairmen and Chief Executive Officer of Halliburton until 2000.
The ruling sent Halliburton shares plummeting 4.6 percent by close to the end of New York trade Monday.
The court noted that in order to win a securities fraud action, investors must prove that the company’s “deceptive conduct caused their claimed economic loss,” a requirement known as “loss causation.”
But Chief Justice John Roberts said in the decision that the plaintiffs are not required to prove loss causation in order to bring about their class-action lawsuit.
The ruling could make it easier to bring similar class action suits against other firms.