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By stan_sipple

Follow up: United States Supreme Court affirms Eighth Circuit Court of Appeals ruling in Stoneridge that plaintiffs failed to state an action against alleged schemers in defendant's securities fraud. SEC Actions Blog. Stoneridge Investment Partners, LLC v. Scientific-Atlanta, Inc., Case No. 06-43 (January 15, 2008)
affirms the Eighth Circuit's Stoneridge Investment Partners, LLC v. Scientific-Atlanta, Inc., 443 F. 3d 987 (Eastern District of Missouri--8th Cir. 2006). While the Eighth Circuit Court of Appeals ruled out holding third parties liable for arms-length transactions with the principal defendant "in goods or services other than securities because that party knew or should have known that the other party would use the transaction to mislead investors in its stock," Justice Kennedy rephrased the appeals court holding to find that the plaintiffs would not have relied on the implications of the third parties' statements or conduct, "Respondents had no duty to disclose; and their deceptive acts were not communicated to the public. No member of the investing public had knowledge, either actual or presumed, of respondents? deceptive acts during the relevant times. Petitioner, as a result, cannot show reliance upon any of respondents? actions except in an indirect chain that we find too remote for liability." Decisions of this magnitude should be made by Congress.

Full post as published by Showmeblawgs on January 27, 2008 (boomark / email).