The best case is equally obvious: the Supreme Court reverses entirely and finds that a plaintiff must prove materiality to gain the further benefit of thefraudonthemarket presumption.
As such, the Respondents may have taken the position that Medical Capital perpetrated a fraudonthemarket as a whole, and that the brokerage firm and its registered person were similarly duped by the falsehoods and misrepresentations.
The securities laws enacted in the 1930s are, at their core, consumer protection laws designed to restore the faith in themarket lost after the 1929 crash, and rely on disclosure and anti-fraud prohibitions to protect investors.