Fourth Circuit Limits Plaintiffs’ Ability to Use Short Seller Publications to Plead Federal Securities Fraud Claims
Date: 05/13/25
On April 8, 2025, the Fourth Circuit held that a short seller publication cannot plausibly expose the truth of a company’s fraud—as needed to plead loss causation with “sufficient specificity”—if the short seller publication contains disclaimers about accuracy and financial motivations. The Fourth Circuit’s decision in Defeo v. IonQ, Inc. adds to recent decisions in the Ninth and Eleventh Circuits that limit plaintiffs’ ability to use short seller publications to plead various federal securities fraud claims.
CGR Alert - Fourth Circuit Limits Plaintiffs’ Ability to Use Short Seller Publications to Plead Federal Securities Fraud Claims.pdf (pdf | 152.87 KB )