Logourl black

West v. Prudential Securities, Inc.

United States Court of Appeals for the Seventh Circuit
282 F.3d 935 (7th Cir. 2002)


Facts

James Hofman, a stockbroker for Prudential Securities, Inc. (Prudential) (defendant), privately told 11 of his customers that Jefferson Savings Bancorp (Jefferson) would definitely be acquired by another entity in the near future. In fact, Hofman was lying as there was no impending acquisition. The plaintiffs brought a class action suit against Prudential for securities fraud. The district court certified the plaintiffs’ class as everyone who bought Jefferson stock during the time that Hofman was lying about the acquisition, basing its decision on the fraud-on-the-market theory. Prudential filed an interlocutory appeal on the class certification issue.

Rule of Law

The rule of law is the black letter law upon which the court rested its decision. To access this section, start your 7-day free trial of Quimbee for Law Students.

Issue

The issue section includes the dispositive legal issue in the case phrased as a question. To access this section, start your 7-day free trial of Quimbee for Law Students.

Holding and Reasoning (Easterbrook, J.)

The holding and reasoning section includes:

  • A “yes” or “no” answer to the question framed in the issue section;
  • A summary of the majority or plurality opinion, using the CREAC method; and
  • The procedural disposition (e.g. reversed and remanded, affirmed, etc.).

To access this section, start your 7-day free trial of Quimbee for Law Students.