Justices Say Federal Securities Laws Don’t Limit State Suits

Law360, New York (May 16, 2016, 10:11 AM EDT) -- The U.S. Supreme Court unanimously ruled Monday that federal securities laws don't preempt certain claims from being brought in state court, in a decision that allows a shareholder suit against a Merrill Lynch unit and other Wall Street firms to proceed in New Jersey state court on claims they engaged in a manipulative short-selling campaign against them.

Voting unanimously, the justices said the Securities Exchange Act does not block shareholders in Escala Group Inc. from bringing their claims in a New Jersey court under the state's securities and anti-racketeering laws. The decision upholds a Third Circuit ruling that remanded the claim...

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