Behind The Court’s Decision In Merrill Lynch V. Dabit

Law360, New York (March 30, 2006, 12:00 AM EST) -- In an 8-0 decision, the United States Supreme Court held on March 21, 2006 that the Securities Litigation Uniform Securities Act of 1998 (“SLUSA”) pre-empts state law securities fraud class actions even where federal law provides no private remedy. The Court’s decision in Merrill Lynch v. Dabit, No. 04-1371, likely represents the death knell for “holder class actions”—claims brought on behalf of classes of investors alleging that they were defrauded into holding shares they had previously purchased. For decades, holders have been barred from bringing Rule...
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