First Circuit Holds that Investors Adequately Alleged Loss Causation

In its first substantive decision on loss causation, the First Circuit vacated the dismissal of investors’ §10(b) claims against CVS Caremark Corp. and its top officers, holding that the complaint adequately alleged that statements by CVS Caremark’s CEO during an investor conference call plausibly revealed to the market that CVS Caremark had service and integration problems stemming from an earlier merger.  The court’s opinion expressly rejects the defendants’ arguments that the loss-causing disclosures must contain a direct admission that previous statements were untrue, particularly where contemporaneous analyst reports plausibly alerted the market that the merger had been unsuccessful.