High Court backs company in stock fraud case
SUPREME COURT A unanimous Supreme Court is refusing to loosen the standard for proving securities fraud. The case could make it harder for investors to collect damages against corporations like Enron.
In today's case, the court sided with Dura Pharmaceuticals, which was sued by investors after a steep drop in its stock price in 1998. Investors said they bought the company's shares at inflated prices because of false statements about its prospects.
The Ninth Circuit Court of Appeals found that investors did not need to show fraud caused the drop, just that the original price was inflated. The Supreme Court disagreed.
Among those backing the company in court: the Bush administration and the Securities Industry Association.
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