Law360, New York ( September 23, 2015, 3:32 PM EDT) -- The Fifth Circuit's recent opinion in Ludlow v. BP PLC, --- F.3d ---, (5th Cir. Sept. 8, 2015), could spell the end for a common theory of fraud in securities class actions. Materialization-of-the-risk cases are a favorite of the securities class action plaintiffs bar. In these cases, plaintiffs alleged that a company misrepresented or withheld information that caused the market to miscalculate the company's exposure to a particular risk. Every company is susceptible to risks, whether it be decline in commodity prices, natural or man-made disasters, competition, labor disputes, technological obsolescence, currency fluctuations, etc. — the risks are endless. When a company's stock price declines following a disclosure that you-name-the-risk materialized — as every company must do on occasion — plaintiffs lawyers will scour the company's prior disclosures that concern the risk and allege (with the benefit of hindsight) that the company and its executives did not accurately explain the company's exposure to the risk. The damages in such cases are usually easy to calculate — plaintiffs say that the stock was inflated by the amount of the share price decline following the revelation of the risk. And if the case is certified as a class action, the damages typically run in the hundreds of millions, if not billions....