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21 Ne. J. Legal Stud. 1 (2009)

handle is hein.journals/neastjol21 and id is 1 raw text is: 1/Vol.21/North East Journal of Legal Studies THE STONERIDGE DECISION AND SECONDARYACTOR LIABILITY IN SECURITIES FRAUD by Eileen P. Kelly* Alka Bramhandkar** INTRODUCTION Securities fraud class action suits increased substantially in the wake of the scandals at Enron, WorldCom, and a host of other corporations. On January 15, 2008, the Supreme Court handed down one of the most important securities fraud cases in decades in Stoneridge Investment Partners, LLC, v.Scientific-Atlanta, Inc . The focus of the Stoneridge case was secondary actor scheme liability. Secondary actors are parties that engage in business relationships with a company. Such parties could include suppliers, investment banks, financial services, law firms and accounting firms. In Stoneridge, the question put before the Supreme Court was whether shareholders could bring a private suit against secondary actors in a securities fraud action. First, the facts of the case will be explained. Next background information on private causes of action is provided Then the decisions of the District Court, Court of Appeals, and Supreme Court will be outlined. Finally, the implications of the Supreme Court's decision will be discussed. * Professor of Management, Ithaca College, School of Business, NY. **Associate Professor of Finance and International Business, Ithaca College, School of Business, NY.

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