|  | | 2008 News and Press Releases | | |
HEADLINE NEWS:
A Win for Wall Street: Stoneridge might be the most important finance case the Supreme Court decides this year.
Cynthia Waller Vallario
Investment Dealers' Digest. April 28, 2008
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EXCERPT: A Win for Wall Street: Stoneridge might be the most important finance case the Supreme Court decides this year. In a controversial verdict, the US Supreme Court last January refused to expand liability to a class of defendants in a major shareholder securities fraud case, citing precedent and Congressional intent, thus declining to open up a new avenue to punish "scheme liability" scams. The decision may significantly affect the future of private rights of action under federal securities laws. Does participation in a scheme to manipulate earnings and stock price convert secondary actors into primary violators who are liable to defrauded investors under federal securities laws? That is a difficult argument to prove, and the stringent pleading requirements mandated in these cases recently became even tougher. In a 5-3 opinion delivered in Stoneridge Investment Partners v. Scientific-Atlanta and Motorola, the court ruled investors had no private cause of action against a company's suppliers and vendors unless deceptive misconduct by these parties was specifically relied upon by the plaintiffs in their investment decisions. Stoneridge might be the most important finance case the high court decides this year, extending a winning streak for business and Wall Street in shareholder class actions that began in 2004. |
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