Supreme Court Delivers Another Strike to Shareholders

Last week, the U.S. Supreme Court set a higher legal standard for investors to overcome when claiming fraud against companies.  In an 8-1 decision, the Court embraced strict interpretation of a provision of the Private Securities Litigation Reform Act of 1995 that requires plaintiffs to show that the defendant intended to deceive, manipulate, or defraud.  The Court’s ruling will give judges more latitude to dismiss cases that cannot meet the burden set by the court.  You can read the Court's decision in Tellabs v. Makor Issues and Rights, Ltd. by clicking HERE.

Source:  "Justices Tighten Rules on Shareholder Suits" by Stephen Labaton, published in The New York Times.