As I have noted in prior posts (most recently here), courts have over time evinced a continuing skepticism of securities class action lawsuit allegations based on short-seller reports. The short sellers’ financial incentives and their reliance on anonymous sources have caused courts to be wary of securities suit allegations based on their reports. In a recent Fourth Circuit decision in a case in which the plaintiffs’ allegations were largely relied on a short-seller’s report, the appellate court affirmed the district court’s dismissal of the case, based on the plaintiffs’ failure to adequately allege loss causation. The court’s opinion provides several interesting observations about securities suit allegations based on short sellers’ reports.Continue Reading 4th Circ.: Short Seller Report’s Allegations Insufficient to Establish Loss Causation