US securities case will decide when investors can sue
In what has been described as the most important securities case in a decade, the US Supreme Court is to hear arguments on whether investors have to lose money before they can sue a company that lies about its stock.
The Financial Times reports the case before the justices is an important test of the Private Securities Litigation Reform Act, which requires a closer link between what a company does and the losses investors seek to recover. The case involves Dura Pharmaceuticals, a small company that was sued by investors after its share price dropped 47% in a day during February 1998. The case was thrown out by a federal district judge who ruled that the investors had failed to show that the company\'s misrepresentations caused their loss. But the Ninth Circuit Federal Appeals Court reversed it. Full report in the Financial Times