In an unanimous decision, the Supreme Court sided with Merrill Lynch & Co. in limiting the rights of some shareholders to bring class-action cases. The loophole would have allowed class-action securities lawsuits to proceed at the state level.
In the opinion, written by Justice John Paul Stevens, the justices said that the case fell outside the scope of the Securities Litigation Uniform Standards Act of 1998. The law had been aimed at restricting civil class-action securities lawsuits, but several attorneys have sought ways around the statutes to the state level, where local laws can allow broader claims.
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