A New Orleans court has overturned the class-certification of a group of shareholders looking to sue major investment banks for more than $40 billion to cover the banks’ alleged role in Enron Corp.’s accounting fraud.
The opinion from the 5th U.S. Circuit Court of Appeals reversed a ruling by the Houston federal judge overseeing all of the Enron cases. In its opinion, the three-judge panel said that class certification can “be the backbreaking decision that places 'insurmountable pressure' on a defendant to settle, even when the defendant has a good chance of succeeding on the merits.”
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