Musick clarified defendants' obligations

Article Abstract:

The US Supreme Court ruled in Musick, Peeler & Garrett v. Employers Insurance of Wausau that there is an implied right of contribution among defendants in private securities fraud cases under Securities Exchange Act 10(b) and its implementing SEC Rule 10b(5). The majority opinion noted that Sections 9 and 18 of the act on public filing misstatements and market manipulation both address misconduct similar to Rule 10b(5) violations and contain a right of contribution. Thus, the court ruled that contribution would also be appropriate in Rule 10b(5) actions.

Remedies, Securities fraud, Contribution (Law)

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The Securities and Exchange Commission issues amicus letter at the district court level to stem meritless securities litigation

Article Abstract:

The SEC intervened in a case it believed was frivolous through an amicus letter on Nov 8, 1994. The suit contends that Cooper Industries Inc failed to warn investors that it was insufficiently diversified to be unaffected by a drop in oil prices. The SEC felt the suit was vague and failed to present particular instances of fraud. This action, by the SEC rather than an employee, reveals the SEC's intention to deter frivolous suit filings but should not be taken as a sign to submit all class action suits for review.

Regulation, Licensing, and Inspection of Miscellaneous Commercial Sectors, Security and Commodity Services, Securities & Commodities Services, Securities, Commodity Contracts, and Other Financial Investments and Related Activities, Regulation misc. commercial sectors, Securities & Exchange Commisn, Political activity, Prevention, Securities industry, United States. Securities and Exchange Commission, Frivolous suits (Civil procedure)

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The House bill's 'loser pays' provision and its single standard of recklessness would affect much private securities litigation

Article Abstract:

Two aspects of HR 1058, the Securities Litigation Reform Act that the House recently passed, are especially noteworthy. The so-called loser pays provision would actually have limited scope and has considerable precedent. A little-known safe-harbor provision in the bill would affect far more companies. Almost as contentious is the effort to set a precise standard for recklessness. The federal courts should receive sole jurisdiction over private actions regarding securities registered with the SEC.

Standards, United States, Political aspects, Securities law, Recklessness (Law), Right of action

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