Court Limits Investors' Suits Over Fraud

Justices side with big business in important securities case
By Jonas Oransky,  Newser Staff
Posted Jan 15, 2008 5:14 PM CST
Chief Justice of the United States John Roberts addresses a a full house in the University Theatre on The University of Montana campus in Missoula, Thursday, Sept. 13, 2007. (AP Photo/Todd Goodrich)   (Associated Press)
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(Newser) – The Supreme Court today made it harder for defrauded investors to sue to get their money back. The court limited the ability of investors to sue third parties—accountants, bankers, and lawyers, for example—who help a company commit securities fraud. The 5-3 ruling, considered one of the most important business decisions in years, will make it harder for Enron victims to recover their money, the Washington Post reports.

“The court held that you are not your brother’s bookkeeper,” one legal analyst told the New York Times. The decision also may make it more difficult to bring suits related to losses in the mortgage industry, the Post notes. John Paul Stevens’ dissent argued that in siding with big business, the court was rendering "toothless" the right for investors to sue over corporate fraud.