Haynes and Boone's Newsroom

Supreme Court Rejects "Scheme Liability" Theory in Securities Class Actions
01/16/2008
George Bramblett Jr., Nicholas Even, Daniel Gold, Carrie Huff, Odean Volker, Thad Behrens

The Supreme Court issued a ruling in Stoneridge Investment Partners v. Scientific-Atlanta, Inc., one of the most closely-watched securities cases in decades. In a 5-3 decision, the Court squarely rejected efforts to bring securities class actions based on “scheme liability” against secondary actors – such as lawyers, lenders, investment banks, accountants, vendors – that enter into transactions with public companies.