U.S. Supreme Court declines to expand securities fraud liability

In the latest in a string of rulings favoring business interests, the U.S. Supreme Court held today that parties who did not directly mislead investors cannot be liable for securities fraud under SEC Rule 10b-5.  By a 5-3 vote, the court refused to recognize the concept of "scheme liability" as to third parties who participate in a fraudulent scheme but do not themselves issue a false statement.

See Justice Anthony Kennedy's opinion in Stoneridge Investment Partners v. Scientific-Atlanta here.  And see earlier discussion of the case in the Oregon Business Litigation Blog here.