The Supreme Court on Monday ruled that a mutual fund’s investment adviser may not be sued for securities fraud over misstatements in fund prospectuses.
The 5-to-4 decision split along ideological lines. Justice Clarence Thomas, writing for the majority, said that only the fund itself could be held liable for violating a Securities and Exchange Commission rule that makes it unlawful for “any person, directly or indirectly” to “make any untrue statement of material fact” in connection with buying or selling securities.
Sunday, June 19, 2011
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