The Supreme Court is on a roll. Earlier this week, it shot down an antitrust lawsuit against Wall St. banks for their role in dot-com IPOs. As with most lawsuits stemming from that period, this case seemed mostly about disgruntled investors wanting to blame someone for their losses. Now the Court has handed down another decision that should please the market. In an 8-1 ruling, the Court ruled that if you bring a class action securities lawsuit against a firm, you must supply evidence that corporate officers actually were engaged in or had knowledge of some sort of securities fraud. You can't just sue cause your stock went down and you want somebody's neck to wring. Unfortunately, it sounds like lawyers will find loopholes in the ruling, ensuring that these silly lawsuits will probably continue. But seeing as the only winners in these cases are the lawyers, anything that mitigates them should be good for companies, investors and customers, who end up paying the price of all this litigation in the goods they buy.
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