
Dan Brecher
Counsel
212-286-0747 dbrecher@sh-law.comFirm Insights
Author: Dan Brecher
Date: September 15, 2015
Counsel
212-286-0747 dbrecher@sh-law.comThe impact of U.S. Supreme Court decisions is often far-reaching. However, as highlighted in a recent study, 1 in 20 rulings suggest that Supreme Court decisions influence the securities market.
The study’s findings were particularly apparent in the wake of the Supreme Court’s decision to uphold the Affordable Care Act (ACA). Given the complexity of the decision, many news outlets initially reported incorrectly that the law had been struck down, which sent healthcare stocks surging. When the media clarified the Supreme Court’s decision in NFIB v. Sebelius, the stocks fell sharply, resulting in millions of dollars in investor losses.
The study, “Law on the Market: Evaluating the Securities Market Impact of Supreme Court Decisions,” confirms that these cases are not outliers. In fact, so-called “law on the market” events are fairly common. Overall, the study authors identified 79 cases where the share price of one or more publicly-traded companies moved in direct response to a Supreme Court decision. Over fifteen years, Supreme Court decisions directly resulted in more than 140 billion dollars in absolute changes in wealth.
So can legal experts use this information to make a profit on the stock market?
The study concludes that “[f]or those who are able to quickly and properly assess the direction and magnitude of the change in the information state, the rewards can be significant.”
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
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No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
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