Cisco's Scientific-Atlanta unit has won what has been described in the Wall Street Journal as:
"The biggest securities litigation case in a generation."
The U.S. Supreme ruled that product vendors, lenders, accountants and other secondary participants can not be sued for "scheme liability" under the federal securities laws.
 "The Supreme Court today handed down a major victory for the U.S. economy and investor welfare," said Steve Shapiro of the Chicago based law firm Mayer Brown, who represented Cisco's Scientific-Atlanta in the case. |
"The Court understood that the trial lawyers’ theory of scheme liability was simply a scheme to rake in billions of dollars for themselves at the expense of the investors they purported to represent."
The major conclusion of the U.S. Supreme Court ruling is on page 4:
"We conclude the implied right of action does not reach the customer/supplier companies because the investors did not rely upon their statements or representations."
View the entire 33 page U.S. Supreme Court ruling
Of the 9 Justices serving on the U.S. Supreme Court, Justice Stephen Breyer did not participate in the case because he owns stock in Cisco, the parent company of Scientific-Atlanta.
Many predict that this ruling will also doom the lawsuits being pressed by Enron and HealthSouth investors too!
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