I. Capital Markets
With "more than half of all U.S. households," previously assessed at $57 million, participating in equity markets through "investments either directly in securities or indirectly in mutual funds" the need to maintain investor confidence is paramount.  Ways of maintaining investor confidence include enforcing strict compliance with established auditing, disclosure, and financial reporting requirements.  Furthermore, allowing adequate remedies at law for violations of securities law promotes investor confidence in the capital markets. However, investors seeking private class action lawsuits against potential defendants such as lawyers, banks, and accountants alleged to have aided and abetted securities fraud face a substantial impediment.
In a recent 5-3 decision, the United States Supreme Court ruled in the case of Stoneridge Investment Partners, LLC v. Scientific-Atlanta, Inc.  Writing for the majority, Justice Anthony Kennedy was joined by Chief Justice John Roberts, Justice Samuel Alito, Justice Antonin Scalia, and Justice Clarence Thomas. While it is clear that the majority affirmed the judgment of the United States Court of Appeals for the Eighth Circuit, the future is unclear for investors wishing to bring class action suits under the theory of so-called "scheme liability." [More]