Major decision just handed down in Stoneridge case by the U.S. Supreme Court. The National Association of Manufacturers had worked hard on this issue, and were optimistic about the ruling, but…whew. More in a bit.
PointofLaw quotes Steve Shapiro of Mayer Brown, who argued the case for the winning side:
The Supreme Court today handed down a major victory for the U.S. economy and investor welfare. The Court understood that the trial lawyers’ theory of ‘scheme liability’ was simply a scheme to rake in billions of dollars for themselves at the expense of the investors they purported to represent.
From Dow Jones:
WASHINGTON -(Dow Jones)- The U.S. Supreme Court on Tuesday handed corporations another securities lawsuit victory, ruling 5-3 that investors can’t bring private lawsuits against third parties in corporate-fraud cases unless they relied on actions by those parties when making investment decisions.
“We conclude the private right of action does not reach the customer/supplier companies because the investors did not rely upon their statements or representations,” Justice Anthony Kennedy said in the majority’s opinion.
The high court affirmed a lower court ruling that had barred an investor lawsuit against Scientific-Atlanta Inc., now a unit of Cisco Systems Inc. (CSCO) , and Motorola Inc. (MOT). The companies, vendors for cable company Charter Communications Inc. (CHTR), were alleged to have participated in a cable control box sales scheme that inflated Charter’s revenue by $17 million in a much larger accounting scheme. (Charter isn’t a party to the lawsuit.)
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