SIMPLICITY AND CERTAINTY IN THE MEASURE OF RECOVERY UNDER RULE B-10-5

The measure of recovery in a securities fraud case necessarily require s deciding whether a plaintiff should recover for any change in price of the security due to market movements as well as any change in price due to the fraud. The Conference Report accompanying the Private Secu rities Litigation Reform Act of 1995 states the bill limits damages to those caused by fraud and not by other market conditions. The bill it self, however, does not do this and more generally, confuses this sepa ration by focusing on a somewhat different effect-change in price due to market overreaction to disclosures correcting the fraud (the ''cras h'' effect). Even as to this more narrow element, the effect of the bi ll is incomplete and difficult to fit into any broader theory about wh at damages should be recoverable, leaving a bill whose only unifying t heme is to benefit defendants.