Basic Inc. v. Levinson

Basic Inc. v. Levinson (1988) is a Supreme Court case that clarified when investors can sue for securities fraud. The Court ruled that an investor can make a legal claim if they relied on false or misleading statements about a company’s stock, even if they haven’t directly bought the stock yet. This case emphasized the importance of "reliance," meaning the investor believed and acted based on the false information. It also established that plaintiff needs to show that the misstatements had a material impact on their decision to buy or sell the stock.