Today's Date: Add To Favorites
Supreme Court rules against investors in fraud case
Law Center | 2008/01/15 09:04
The Supreme Court on Tuesday ruled against investors seeking to sue businesses for scheming to manipulate stock prices of publicly traded companies. In a 5-3 ruling, the court gave a measure of protection from securities suits to suppliers, banks, accountants and law firms that do business with corporations engaging in securities fraud.

The court ruled against investors who alleged that two suppliers colluded with Charter Communications Inc. to deceive Charter's stockholders and inflate the price of the cable TV company's stock.

Charter investors do not have the right to sue because they did not rely on the deceptive acts of Charter's suppliers, said the majority opinion by Justice Anthony Kennedy.

Kennedy pointed to the Securities and Exchange Commission as a protector of investors in similar cases and that the regulatory agency has used its enforcement power to collect more than $10 billion over the past five years.

The decision is likely to have an impact on a similar class-action lawsuit by shareholders who invested in scandal-ridden Enron Corp.

Investors in Enron, once the nation's seventh-largest company, are seeking more than $30 billion from Wall Street investment banks, alleging they schemed with Enron to hide its financial problems.

In the Supreme Court, the lawsuit against Charter's suppliers has been closely watched by business and industry, which argued that an adverse ruling would clear the way for a flood of lawsuits.

In dissent, Justice John Paul Stevens said the court is conducting a continuing campaign to undercut investor lawsuits.

A liberal Supreme Court in 1971 endorsed investor lawsuits under antifraud provisions of securities law at issue in the current lawsuit. In 1994, a more conservative Supreme Court imposed limits on such lawsuits, prohibiting cases against third parties for aiding and abetting a company's misstatements. The Republican-controlled Congress enacted the restrictions into law the next year.

In a scheme allegedly designed to inflate the cable TV company's revenue picture, Charter got Motorola and Scientific-Atlanta to buy advertising with money that Charter provided. Charter supplied the funds by paying a $20 premium on each of hundreds of thousands of cable TV set-top boxes, for a total of $17 million. The amount of the overpayments equaled the amount the two suppliers paid for the ads.

Charter reported the advertising payments as revenue, a step that helped Charter meet Wall Street's expectations for the fourth quarter of 2000.

Motorola and Scientific-Atlanta allegedly backdated the contracts for the set-top boxes to make the advertising and the set-top boxes transactions appear unrelated. Scientific-Atlanta allegedly submitted documentation to Charter attributing the price increase to increased manufacturing expenses.

Justice Stephen Breyer disqualified himself from the case because he owns stock in Cisco Systems Inc., which now owns Scientific-Atlanta.



[PREV] [1] ..[5503][5504][5505][5506][5507][5508][5509][5510][5511].. [8292] [NEXT]
All
Class Action
Bankruptcy
Biotech
Breaking Legal News
Business
Corporate Governance
Court Watch
Criminal Law
Health Care
Human Rights
Insurance
Intellectual Property
Labor & Employment
Law Center
Law Promo News
Legal Business
Legal Marketing
Litigation
Medical Malpractice
Mergers & Acquisitions
Political and Legal
Politics
Practice Focuses
Securities
Elite Lawyers
Tax
Featured Law Firms
Tort Reform
Venture Business News
World Business News
Law Firm News
Attorneys in the News
Events and Seminars
Environmental
Legal Careers News
Patent Law
Consumer Rights
International
Legal Spotlight
Current Cases
State Class Actions
Federal Class Actions
New Hampshire courts hear 2 ..
PA high court orders countie..
Tight US House races in Cali..
North Carolina Attorney Gene..
Republicans take Senate majo..
What to know about the unpre..
A man who threatened to kill..
Ford cuts 2024 earnings guid..
Kenya’s deputy president pl..
South Korean court acquits f..
Supreme Court grapples with ..
Supreme Court leaves in plac..
Kentucky sheriff accused of ..
New rules regarding election..
North Carolina appeals court..


Class action or a representative action is a form of lawsuit in which a large group of people collectively bring a claim to court and/or in which a class of defendants is being sued. This form of collective lawsuit originated in the United States and is still predominantly a U.S. phenomenon, at least the U.S. variant of it. In the United States federal courts, class actions are governed by Federal Rules of Civil Procedure Rule. Since 1938, many states have adopted rules similar to the FRCP. However, some states like California have civil procedure systems which deviate significantly from the federal rules; the California Codes provide for four separate types of class actions. As a result, there are two separate treatises devoted solely to the complex topic of California class actions. Some states, such as Virginia, do not provide for any class actions, while others, such as New York, limit the types of claims that may be brought as class actions. They can construct your law firm a brand new website, lawyer website templates and help you redesign your existing law firm site to secure your place in the internet.
St. Louis Missouri Criminal Defense Lawyer
St. Charles DUI Attorney
www.lynchlawonline.com
Lorain Elyria Divorce Lawyer
www.loraindivorceattorney.com
Legal Document Services in Los Angeles, CA
Best Legal Document Preparation
www.tllsg.com
Car Accident Lawyers
Sunnyvale, CA Personal Injury Attorney
www.esrajunglaw.com
East Greenwich Family Law Attorney
Divorce Lawyer - Erica S. Janton
www.jantonfamilylaw.com/about
St. Louis Missouri Criminal Defense Lawyer
St. Charles DUI Attorney
www.lynchlawonline.com
Connecticut Special Education Lawyer
www.fortelawgroup.com
  Law Firm Directory
 
 
 
© ClassActionTimes.com. All rights reserved.

The content contained on the web site has been prepared by Class Action Times as a service to the internet community and is not intended to constitute legal advice or a substitute for consultation with a licensed legal professional in a particular case or circumstance. Affordable Law Firm Web Design