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Loyola Law Review



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Reliance, Damages, Due Diligience, Fifth Circuit


The Fifth Circuit decided some important securities cases during the survey period and issued some interesting opinions. Although the court consistently claimed a conservative reliance on precedent and seldom acknowledged making new law, it interpreted some well-established doctrine in surprising ways. The past year's opinions in fraud cases provide guidance in the related areas of reliance, damages, and plaintiff's due diligence. The year also witnessed important developments in the law governing the relationship between brokerage firms and their clients. The most spectacular development in this area during the survey year was the October collapse in security prices. In light of the crash and increasing volatility in the securities markets, many have come to question the nature of the relationship between the price of securities and their value. In the spirit of the times, this survey starts with two opinions dealing with the relationship between price and value.