Link to OpinionThe Supreme Court today ruled 7-2 in favor of class-action lawyers pursuing securities cases under state law in a decision that involved the Allen Stanford Ponzi scheme.
The Supreme Court case, Chadbourne & Parke v. Troice, focused on the Securities Litigation Uniform Standards Act, which forbids bringing large securities class actions under state law. The question in the case was whether civil class action suits could proceed against defendants who allegedly helped Stanford’s Ponzi scheme by falsely representing that financial products that weren’t securities under the Securities Litigation law were covered securities. A District Court dismissed the lawsuits, then the Fifth Circuit reversed the lower court’s decision.The Supreme Court today upheld the Fifth Circuit decision, saying that the Litigation Act does not preclude the state-law class-action cases. Justices Anthony Kennedy and Samuel Alito dissented.