Tuesday, January 15, 2008

Stop, restart.

Pity the poor students in Securities Litigation last semester. Everything they learned has been replaced. For those who get a kick out of snark, see part III of Stevens' dissent. Any deeper analysis than that will take time, there's a lot of substantive securities law and a lot of substantive legislative interpretation being hashed out in there.

Also, do the non-settling defendants in Enron look smarter or luckier today?


Anonymous Anonymous said...


1/15/2008 9:25 AM  
Anonymous Anonymous said...

Thankfully, Cypers did teach those of us in Securities Litigation last semester that this outcome was possible and even likely. And he made sure to email us the case this morning, one of the many reasons he was a great professor.

1/15/2008 12:19 PM  
Anonymous Anonymous said...

hmmm. interesting post.
Can you give us the quick and dirty explanation of how this case turns everything upside down?

1/15/2008 12:54 PM  
Anonymous Anonymous said...

In simplest terms:

The case deals with the liability of 3rd parties in securities class actions. The opinion weighed in on an issue that the Supreme Court had not yet decided - whether 3rd parties (banks, accounting firms) can be sued by plaintiffs where they themselves do not commit a "deceptive act" (often a material misstatement or omission about a company's financials). This theory of liability is called "scheme liability", and the Court in Stoneridge rejects it. The Court's reasoning is that the plaintiffs could not have relied on these third parties' actions or statements because they did not reach the plaintiffs, and therefore there is no cause of action.

This decision is important in that many companies committing securities fraud (Enron, for example) go bankrupt, and have no assets for a plaintiff class to recover. By going after banks for helping Enron with their "scheme", the plaintiffs could have recovered from the banks. But the Supreme Court here says this isn't an option.

You gotta believe Credit Suisse (the non-settling defendant in Enron) is celebrating right now.

1/15/2008 1:30 PM  
Anonymous Anonymous said...


1/16/2008 10:21 AM  
Anonymous Anonymous said...

grades are going up, slowly but surely.

1/16/2008 11:23 AM  
Anonymous Anonymous said...

is there some sort of deadline by which grades must be submitted?

1/16/2008 11:39 AM  

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