Stoneridge Investment Partners v. Scientific-Atlanta, Inc.

Stoneridge Investment Partners v. Scientific-Atlanta

Argued October 9, 2007
Decided January 15, 2008
Full case name Stoneridge Investment Partners, L.L.C., Petitioner v. Scientific-Atlanta, Inc., et al.
Docket nos. 06-43
Citations

552 U.S. 148 (more)

128 S. Ct. 761; 169 L. Ed. 2d 627; 2008 U.S. LEXIS 1091; 76 U.S.L.W. 4039; Fed. Sec. L. Rep. (CCH) P94,556; 21 Fla. L. Weekly Fed. S 46
Prior history Certiorari to the United States Court of Appeals for the Eighth Circuit
Holding
The private right of action under §10(b) of the Securities Exchange Act of 1934 does not extend to aiders and abettors. Because the conduct of a secondary actor must therefore satisfy each of the elements for §10(b) liability, the plaintiff must prove reliance upon a material misrepresentation or omission by the defendant.
Court membership
Chief Justice
John G. Roberts
Case opinions
Majority Kennedy, joined by Roberts, Scalia, Thomas, Alito
Dissent Stevens, joined by Souter, Ginsburg
Breyer took no part in the consideration or decision of the case.
Laws applied
Section 10(b) of the Securities Exchange Act.

Stoneridge Investment Partners v. Scientific-Atlanta, 552 U.S. 148 (2008), was a decision by the United States Supreme Court pertaining to the scope of liability of secondary actors, such as lawyers and accountants, for securities fraud under the Securities Exchange Act of 1934. In a 5-3 decision authored by Justice Anthony M. Kennedy, the Court held that "aiders and abettors" of fraud cannot be held secondarily liable under the private right of action authorized by §10(b) of the Exchange Act. Such defendants can only be held liable if their own conduct satisfies each of the elements for §10(b) liability. Therefore, the plaintiff must prove reliance, in making a decision to acquire or hold a security, upon a material misrepresentation or omission by the defendant.

Stoneridge was recognized by The New York Times as the “most important securities fraud case in years,”[1] and also commented by Wall Street Journal,[2] Forbes,[3] and Business Week.[4]

See also

References

  1. ↑ Greenhouse, Linda (2008-01-15). "Supreme Court Restricts Securities Lawsuits". New York Times.
  2. ↑ Bravin, Jess; Scannel, Kara (2008-01-16). "Top Court Limits Shareholder Fraud Suits". Wall Street Journal.
  3. ↑ Wingfield, Brian (2008-01-15). "Stoneridge And The Court". Forbes.
  4. ↑ McCollam, Douglas (2008-01-15). "StoneRidge Ruling Shields Third-Party Advisers". BusinessWeek.

Further reading


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