Court Thwarts Enron Shareholders Class Action

Law360, New York (March 19, 2007, 12:00 AM EDT) -- An appeals court on Monday blocked Enron Corp. shareholders from pursuing their $40 billion class action against investment banks, in a decision that could affect the liability of third parties in fraud cases.

The order by the U.S. Court of Appeals for the Fifth Circuit reversed a previous decision in the U.S. District Court for the Southern District of Texas, which gave shareholders the green light to file a class action.

The appeals court decided that investment banks were not liable for participating in a scheme...
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