Stoneridge Investment Partners v. Scientific-Atlanta
Encyclopedia
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,” and also commented by Wall Street Journal, Forbes, and Business Week.
Securities fraud
Securities fraud, also known as stock fraud and investment fraud, is a practice that induces investors to make purchase or sale decisions on the basis of false information, frequently resulting in losses, in violation of the securities laws....
under the Securities Exchange Act of 1934
Securities Exchange Act of 1934
The Securities Exchange Act of 1934 , , codified at et seq., is a law governing the secondary trading of securities in the United States of America. It was a sweeping piece of legislation...
. 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
Secondary liability
Secondary liability, or indirect infringement, arises when a party materially contributes to, facilitates, induces, or is otherwise responsible for directly infringing acts carried out by another party. The US has statutorily codified secondary liability rules for trademarks and patents; however,...
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
The New York Times
The New York Times is an American daily newspaper founded and continuously published in New York City since 1851. The New York Times has won 106 Pulitzer Prizes, the most of any news organization...
as the “most important securities fraud case in years,” and also commented by Wall Street Journal, Forbes, and Business Week.
See also
- List of United States Supreme Court cases, volume 552
- Central Bank v. First Interstate BankCentral Bank v. First Interstate BankCentral Bank of Denver v. First Interstate Bank of Denver, 511 U.S. 164 , was a decision by the United States Supreme Court, which held private plaintiffs may not maintain aiding and abetting suit under Securities Exchange Act § 10....
(1994)