Barclays encouraged by US Supreme Court ruling

by Gill Montia

Story link: Barclays encouraged by US Supreme Court ruling

Barclays and other banks that are involved in US court cases emanating from the Enron scandal have won a significant victory.

Earlier this week the US Supreme Court ruled that investors could not sue third parties for helping a business to commit fraud.

In the case of Stoneridge Investment Partners v Scientific-Atlanta the court ruled by five votes to three in favour of Scientific-Atlanta, which was accused of helping Charter Communications to commit fraud.

Barclays, Merrill Lynch and Credit Suisse are all currently involved in Enron-related litigation.

They are alleged to have conspired with Enron to defraud investors prior to the collapse of the business in 2001.

Other banks including, JPMorgan and CIBC have already settled investors’ claims, rumoured to amount to billions of dollars.

US law on whether an investor can sue a third party for helping companies to commit fraud has been unclear, with some lower courts having ruled in favour of investors.

The decision in the case of Stoneridge Investment Partners v Scientific-Atlanta is the latest in a series of Supreme Court rulings that have weakened investors’ powers to recover damages for securities frauds.