The Third Circuit threw out a nearly 30-year-old rule that let companies escape securities fraud lawsuits by pointing to a quick stock-price recovery. 

The September 30 decision abrogated what the court called the Oran-Burlington rule – a Third Circuit test that treated a stock price’s return to pre-disclosure levels as conclusive proof that a company’s false statements were immaterial. The ruling vacated the dismissal of a class action against Ocugen, Inc., a small publicly traded pharmaceutical company, and its chief executive. 

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