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The Stoneridge case – much ado about nothing?

The Stoneridge case – much ado about nothing? Purpose – The purpose of this paper is to explain the issues related to “scheme liability” that underlie the current case before the United States Supreme Court, Stoneridge Investment Partners v. Scientific‐Atlanta and Motorola. Design/methodology/approach – Explains the facts of the Stoneridge case; explains the legal framework, including ongoing debates over the scope of liability under Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b‐5, the Supreme Court's decision in Central Bank, N.A. v. First Interstate Bank, development of the “scheme liability” concept by various plaintiffs' lawyers, and three circuit court decisions related to scheme liability; and the philosophy that is likely to guide the Supreme Court in Stoneridge . Findings – The Stoneridge case provides the Supreme Court with the unique opportunity to clarify the limits of liability under Section 10(b) and Rule 10b‐5. It is the first time since Central Bank that the Supreme Court will grapple with the contours of liability for so‐called secondary actors. Originality/value – A clear explanation of the issues in a highly visible Supreme Court case by an experienced commercial litigator. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Investment Compliance Emerald Publishing

The Stoneridge case – much ado about nothing?

Andrew Edison
Journal of Investment Compliance , Volume 9 (1): 5 – Mar 14, 2008
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Publisher
Emerald Publishing
Copyright
Copyright © 2008 Emerald Group Publishing Limited. All rights reserved.
ISSN
1528-5812
DOI
10.1108/15285810810859243
Publisher site
See Article on Publisher Site

Abstract

Purpose – The purpose of this paper is to explain the issues related to “scheme liability” that underlie the current case before the United States Supreme Court, Stoneridge Investment Partners v. Scientific‐Atlanta and Motorola. Design/methodology/approach – Explains the facts of the Stoneridge case; explains the legal framework, including ongoing debates over the scope of liability under Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b‐5, the Supreme Court's decision in Central Bank, N.A. v. First Interstate Bank, development of the “scheme liability” concept by various plaintiffs' lawyers, and three circuit court decisions related to scheme liability; and the philosophy that is likely to guide the Supreme Court in Stoneridge . Findings – The Stoneridge case provides the Supreme Court with the unique opportunity to clarify the limits of liability under Section 10(b) and Rule 10b‐5. It is the first time since Central Bank that the Supreme Court will grapple with the contours of liability for so‐called secondary actors. Originality/value – A clear explanation of the issues in a highly visible Supreme Court case by an experienced commercial litigator.

Journal

Journal of Investment Compliance – Emerald Publishing

Published: Mar 14, 2008

Keywords: Legislation; United States of America; Securities; Fraud; Liability

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