Posted by Jonathan Adler: Overturning *Stoneridge*: http://volokh.com/archives/archive_2009_08_02-2009_08_08.shtml#1249482313
The [1]WSJ law blog reports that Senators Arlen Specter (D-PA) Jack Reed (D-RI) and Edward Kaufman (D-DE) are pushing legislation to overturn the Supreme Court's decision in Stoneridge Investment Partners v. Scientific-Atlanta. In this case, the Supreme Court held, 5-3, that private rights of action under Section 10(b) of the Securities Act do not reach third-party actions where shareholders did not rely upon the third party's actions or statements. Section 10(b) did not create such "scheme liability," the Court held. Stoneridge was a very significant case -- easily one of the most important securities-law cases of the past ten years. Overturning it would also be quite significant. As the WSJ reports, it would "give plaintiffs lawyers � especially those who file shareholder fraud suits � a shot in the arm." For prior VC posts on Stoneridge see [2]here, [3]here, and [4]here. In addition, here is a a [5]Federalist Society on-line debate on the decision and [6]background materials and the webcast of a mini-conference on the case sponsored by the Center for Business Law and Regulation at Case Western Reserve University. References 1. http://blogs.wsj.com/law/2009/08/05/specter-other-dems-looking-to-reverse-huge-securities-decision/ 2. http://volokh.com/posts/chain_1189798250.shtml 3. http://volokh.com/archives/archive_2008_01_13-2008_01_19.shtml#1200421455 4. http://volokh.com/posts/chain_1190984017.shtml 5. http://www.fed-soc.org/debates/dbtid.16/default.asp 6. http://law.case.edu/centers/business_law/content.asp?content_id=126
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