Strict Standard Set on Investor Suits (Supreme Court)

Source: Associated Press

Strict Standard Set on Investor Suits

By PETE YOST
Thursday, June 21, 2007; 10:51 AM

WASHINGTON -- The Supreme Court on Thursday imposed a strict
standard that investors must meet to keep alive their lawsuits
alleging securities fraud.

In an 8-1 decision, the justices said that courts must weigh possible
innocent explanations for defendants' conduct at the very start of a
securities fraud case. Doing so can lead to early dismissal of
investors' lawsuits.

The ruling came in a shareholders suit against high-tech company
Tellabs Inc.

The firm misled investors by engaging in a scheme to inflate Tellabs'
stock price from December 2000 to June 2001, according to the lawsuit.
It said the company's CEO provided false assurances of robust demand
for the company's products.

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Read more: http://www.washingtonpost.com/wp-dyn/content/article/2007/06/21/AR2007062100803.html