Supreme Court Strikes Blow To Investor Lawsuits

Law360, New York (January 15, 2008, 12:00 AM EST) -- In a landmark ruling Tuesday that may have an effect on the Enron shareholders' suit, the U.S. Supreme Court limited under federal securities laws the liability of third parties for fraud.

In Stoneridge Investment Partners LLC v. Scientific-Atlanta Inc., the court declined to hold third parties responsible when their deceptive acts contributed to another party's fraud but they did not omit material information from those to whom they had a duty to disclose.

In a 5-3 decision along its familiar lines, the Supreme Court affirmed a...
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