October Term 2004 · Docket 03-932
Does a stock price drop prove securities fraud loss?
Investors claim Dura Pharmaceuticals misled the market. The company argues they suffered no loss until they sold shares.
Verified source milestones
- — An official oral-argument transcript was verified.
- — An official oral-argument transcript was verified.
The arguments, in order
This case may have been argued more than once. Each entry below uses that session's official transcript. Later arguments do not erase earlier ones.
Argument 1 ·
What happened at the argument
William Sullivan argued that the case presents two different views of necessary loss.
Michael Hungar argued that buying at an inflated price causes no immediate loss.
Justice Breyer asked for a list of problems with the simple theory.
Read the official transcript for this argument · Official argument details
Sources used for this argument breakdown
- Official Supreme Court Transcript — file page 18, lines 11-21 — Transcript, file page 18, lines 11-21
- Official Supreme Court Transcript — file page 28, lines 1-21 — Transcript, file page 28, lines 1-21
- Official Supreme Court Transcript — file page 3, lines 17-29 — Transcript, file page 3, lines 17-29
- Official Supreme Court Transcript — file page 3, lines 5-15 — Transcript, file page 3, lines 5-15
- Official Supreme Court Transcript — file page 4, lines 31-37 — Transcript, file page 4, lines 31-37
- Official Supreme Court Transcript — file page 4, lines 41-47 — Transcript, file page 4, lines 41-47
- Official Supreme Court Transcript — file page 5, lines 23-29 — Transcript, file page 5, lines 23-29
- Official Supreme Court Transcript — file page 5, lines 33-35 — Transcript, file page 5, lines 33-35
- Official Supreme Court Transcript — file page 51, lines 43-31 — Transcript, file page 51, lines 43-31
- Official Supreme Court Transcript — file page 52, lines 33-5 — Transcript, file page 52, lines 33-5
- Official Supreme Court Transcript — file page 53, lines 31-45 — Transcript, file page 53, lines 31-45
- Official Supreme Court Transcript — file page 54, lines 23-47 — Transcript, file page 54, lines 23-47
- Official Supreme Court Transcript — file page 54, lines 49-11 — Transcript, file page 54, lines 49-11
- Official Supreme Court Transcript — file page 54, lines 7-11 — Transcript, file page 54, lines 7-11
- Official Supreme Court Transcript — file page 55, lines 15-21 — Transcript, file page 55, lines 15-21
- Official Supreme Court Transcript — file page 55, lines 27-27 — Transcript, file page 55, lines 27-27
- Official Supreme Court Transcript — file page 56, lines 11-13 — Transcript, file page 56, lines 11-13
- Official Supreme Court Transcript — file page 6, lines 49-3 — Transcript, file page 6, lines 49-3
- Official Supreme Court Transcript — file page 6, lines 7-15 — Transcript, file page 6, lines 7-15
- Official Supreme Court Transcript — file page 7, lines 19-31 — Transcript, file page 7, lines 19-31
- Official Supreme Court Transcript — file page 7, lines 37-39 — Transcript, file page 7, lines 37-39
- Official Supreme Court Transcript — file page 8, lines 15-21 — Transcript, file page 8, lines 15-21
- Official Supreme Court Transcript — file page 8, lines 25-29 — Transcript, file page 8, lines 25-29
- Official Supreme Court Transcript — file page 8, lines 33-43 — Transcript, file page 8, lines 33-43
- Official Supreme Court Transcript — file page 9, lines 7-13 — Transcript, file page 9, lines 7-13
A citizen's guide to the whole case
What this case is about
This case tests how courts measure financial harm in securities fraud. The dispute centers on the timing of that harm.
Official sources for this section
- Official Supreme Court Transcript — file page 18, lines 11-21 — Transcript, file page 18, lines 11-21
- Official Supreme Court Transcript — file page 28, lines 1-21 — Transcript, file page 28, lines 1-21
- Official Supreme Court Transcript — file page 3, lines 17-29 — Transcript, file page 3, lines 17-29
- Official Supreme Court Transcript — file page 51, lines 43-31 — Transcript, file page 51, lines 43-31
- Official Supreme Court Transcript — file page 54, lines 23-47 — Transcript, file page 54, lines 23-47
How the case got here
The Supreme Court heard oral argument in this case on January 12, 2005.
Official sources for this section
- Official Supreme Court Transcript — file page 3, lines 5-15 — Transcript, file page 3, lines 5-15
- Official Supreme Court Transcript — file page 54, lines 7-11 — Transcript, file page 54, lines 7-11
What each side wants
Dura Pharmaceuticals wants the Court to require proof of actual sale at a lower price.
Broudo wants the Court to accept a stock price drop as proof of loss.
Official sources for this section
- Official Supreme Court Transcript — file page 18, lines 11-21 — Transcript, file page 18, lines 11-21
- Official Supreme Court Transcript — file page 28, lines 1-21 — Transcript, file page 28, lines 1-21
- Official Supreme Court Transcript — file page 3, lines 17-29 — Transcript, file page 3, lines 17-29
- Official Supreme Court Transcript — file page 51, lines 43-31 — Transcript, file page 51, lines 43-31
- Official Supreme Court Transcript — file page 54, lines 23-47 — Transcript, file page 54, lines 23-47
What each side says
Dura Pharmaceuticals argues that holding stock at an inflated price is not a loss.
Broudo argues that buying stock at an inflated price is an immediate loss.
Official sources for this section
- Official Supreme Court Transcript — file page 18, lines 11-21 — Transcript, file page 18, lines 11-21
- Official Supreme Court Transcript — file page 28, lines 1-21 — Transcript, file page 28, lines 1-21
- Official Supreme Court Transcript — file page 3, lines 17-29 — Transcript, file page 3, lines 17-29
- Official Supreme Court Transcript — file page 51, lines 43-31 — Transcript, file page 51, lines 43-31
- Official Supreme Court Transcript — file page 54, lines 23-47 — Transcript, file page 54, lines 23-47
What the justices asked
Justice Scalia asked if the rule looks to market value rather than explicit representations.
Justice Kennedy asked what problems the trial court would face with the lower court opinion.
Official sources for this section
- Official Supreme Court Transcript — file page 4, lines 31-37 — Transcript, file page 4, lines 31-37
- Official Supreme Court Transcript — file page 4, lines 41-47 — Transcript, file page 4, lines 41-47
- Official Supreme Court Transcript — file page 5, lines 23-29 — Transcript, file page 5, lines 23-29
- Official Supreme Court Transcript — file page 5, lines 33-35 — Transcript, file page 5, lines 33-35
- Official Supreme Court Transcript — file page 52, lines 33-5 — Transcript, file page 52, lines 33-5
- Official Supreme Court Transcript — file page 53, lines 31-45 — Transcript, file page 53, lines 31-45
- Official Supreme Court Transcript — file page 54, lines 49-11 — Transcript, file page 54, lines 49-11
- Official Supreme Court Transcript — file page 54, lines 7-11 — Transcript, file page 54, lines 7-11
- Official Supreme Court Transcript — file page 55, lines 15-21 — Transcript, file page 55, lines 15-21
- Official Supreme Court Transcript — file page 55, lines 27-27 — Transcript, file page 55, lines 27-27
- Official Supreme Court Transcript — file page 56, lines 11-13 — Transcript, file page 56, lines 11-13
- Official Supreme Court Transcript — file page 6, lines 49-3 — Transcript, file page 6, lines 49-3
- Official Supreme Court Transcript — file page 6, lines 7-15 — Transcript, file page 6, lines 7-15
- Official Supreme Court Transcript — file page 7, lines 19-31 — Transcript, file page 7, lines 19-31
- Official Supreme Court Transcript — file page 7, lines 37-39 — Transcript, file page 7, lines 37-39
- Official Supreme Court Transcript — file page 8, lines 15-21 — Transcript, file page 8, lines 15-21
- Official Supreme Court Transcript — file page 8, lines 25-29 — Transcript, file page 8, lines 25-29
- Official Supreme Court Transcript — file page 8, lines 33-43 — Transcript, file page 8, lines 33-43
- Official Supreme Court Transcript — file page 9, lines 7-13 — Transcript, file page 9, lines 7-13
Why it matters
This case defines how investors prove financial harm. It sets the standard for measuring loss in market-wide fraud claims.
Official sources for this section
- Official Supreme Court Transcript — file page 18, lines 11-21 — Transcript, file page 18, lines 11-21
- Official Supreme Court Transcript — file page 28, lines 1-21 — Transcript, file page 28, lines 1-21
- Official Supreme Court Transcript — file page 3, lines 17-29 — Transcript, file page 3, lines 17-29
- Official Supreme Court Transcript — file page 51, lines 43-31 — Transcript, file page 51, lines 43-31
- Official Supreme Court Transcript — file page 54, lines 23-47 — Transcript, file page 54, lines 23-47
What happens next
This article currently covers the argument record. Use the official docket link for later case activity.
Official sources for this section
- Official Supreme Court Transcript — file page 3, lines 5-15 — Transcript, file page 3, lines 5-15
- Official Supreme Court Transcript — file page 4, lines 31-37 — Transcript, file page 4, lines 31-37
- Official Supreme Court Transcript — file page 4, lines 41-47 — Transcript, file page 4, lines 41-47
- Official Supreme Court Transcript — file page 5, lines 23-29 — Transcript, file page 5, lines 23-29
- Official Supreme Court Transcript — file page 5, lines 33-35 — Transcript, file page 5, lines 33-35
- Official Supreme Court Transcript — file page 52, lines 33-5 — Transcript, file page 52, lines 33-5
- Official Supreme Court Transcript — file page 53, lines 31-45 — Transcript, file page 53, lines 31-45
- Official Supreme Court Transcript — file page 54, lines 49-11 — Transcript, file page 54, lines 49-11
- Official Supreme Court Transcript — file page 54, lines 7-11 — Transcript, file page 54, lines 7-11
- Official Supreme Court Transcript — file page 55, lines 15-21 — Transcript, file page 55, lines 15-21
- Official Supreme Court Transcript — file page 55, lines 27-27 — Transcript, file page 55, lines 27-27
- Official Supreme Court Transcript — file page 56, lines 11-13 — Transcript, file page 56, lines 11-13
- Official Supreme Court Transcript — file page 6, lines 49-3 — Transcript, file page 6, lines 49-3
- Official Supreme Court Transcript — file page 6, lines 7-15 — Transcript, file page 6, lines 7-15
- Official Supreme Court Transcript — file page 7, lines 19-31 — Transcript, file page 7, lines 19-31
- Official Supreme Court Transcript — file page 7, lines 37-39 — Transcript, file page 7, lines 37-39
- Official Supreme Court Transcript — file page 8, lines 15-21 — Transcript, file page 8, lines 15-21
- Official Supreme Court Transcript — file page 8, lines 25-29 — Transcript, file page 8, lines 25-29
- Official Supreme Court Transcript — file page 8, lines 33-43 — Transcript, file page 8, lines 33-43
- Official Supreme Court Transcript — file page 9, lines 7-13 — Transcript, file page 9, lines 7-13
Official Court provenance
Official docket and case history · Official Supreme Court oral-argument detail page
Title and summary sources
- Official Supreme Court Transcript — file page 18, lines 11-21 — Transcript, file page 18, lines 11-21
- Official Supreme Court Transcript — file page 28, lines 1-21 — Transcript, file page 28, lines 1-21
- Official Supreme Court Transcript — file page 3, lines 17-29 — Transcript, file page 3, lines 17-29
- Official Supreme Court Transcript — file page 51, lines 43-31 — Transcript, file page 51, lines 43-31
- Official Supreme Court Transcript — file page 54, lines 23-47 — Transcript, file page 54, lines 23-47
- Official Supreme Court Transcript — file page 18, lines 11-21 — Transcript, file page 18, lines 11-21
- Official Supreme Court Transcript — file page 28, lines 1-21 — Transcript, file page 28, lines 1-21
- Official Supreme Court Transcript — file page 3, lines 17-29 — Transcript, file page 3, lines 17-29
- Official Supreme Court Transcript — file page 51, lines 43-31 — Transcript, file page 51, lines 43-31
- Official Supreme Court Transcript — file page 54, lines 23-47 — Transcript, file page 54, lines 23-47
Revision history
- Revision 1 · Official Transcript ·
Correction: Rewritten to the concise citizen-facing editorial standard.
- Revision 2 · Official Transcript ·
Correction: Migrated to the dated official Court activity contract without model use.