http://hosted.ap.org/dynamic/stories/S/SCOTUS_SECURITIES_FRAUD?SITE=TXDAM&TEMPLATE=SCOTUS.html&SECTION=HOMEThe justices ruled unanimously for Dura Pharmaceuticals Inc., a division of Ireland-based Elan Corp., which was sued for fraud following a November 1998 disclosure that its asthma drug dispenser didn't receive federal approval as expected. The news sent stock prices lower.
Investors who bring corporate fraud lawsuits must show a link between the alleged illegal activity and a drop in stock prices, the Supreme Court ruled Tuesday in a victory for business groups and the Bush administration.The decision means that investors,
who lost trillions of dollars in stock market wealth following accounting scandals at companies such as Enron Corp. and WorldCom, could have a tougher case in court should they sue. That will depend in part on how stringently lower courts interpret what constitutes an adequate "link."
Backing Dura were the Bush administration, the U.S. Chamber of Commerce and the Securities Industry Association, which feared a wave of fraud claims from investors who bought shares "too high."
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