Law School Professor, Alum File Amicus Brief in Winning Case



An Oregon Supreme Court securities law decision last week adopted the analysis of Professor Meyer Eisenberg and Jason Seibert JD’09, who filed an amicus brief in the case.

The case, Oregon v. Marsh & McClennan Companies Inc., was filed by former Oregon Attorney General John. R. Kroger and alleged that Marsh & McClennan made misleading statements that caused Oregon’s Public Employee Retirement Fund (PERS) to lose about $10 million in stock that it had invested in the insurance firm. Kroger alleged that Marsh & McClennan, “by engaging in a scheme perpetrated by false and misleading statements,” violated Oregon securities law.

Marsh & McClennan said Oregon securities law required that the state prove it relied on Marsh & McClennan’s statements about the company before it bought its stock. The state said proof of reliance wasn’t necessary because “reliance” appeared nowhere in the Oregon Revised Statute (ORS 59.137). If reliance is required, the state said, the court should adopt the “fraud on the market” doctrine endorsed by the U.S. Supreme Court in Basic v. Levinson, 485 US 284 (1988), in which the price of a publicly traded security is presumed to be based on information injected into a well-developed market.

The brief filed by Eisenberg and Seibert focused on refuting Marsh’s claim that Basic v. Levinson was not a part of Oregon law. The Oregon Supreme Court agreed with Eisenberg and Seibert’s analysis, concluding that the price of a company’s stock is presumed to reflect all the information, good and bad, about the company.

 “That’s a fantastic result for PERS,” said Seibert.

The case was sent back to the Oregon Court of Appeals.