Press Releases
Release Date: June 21, 2007
Contact:
Travis Larson, (202) 216-2057, tlarson@sifma.org
Tellabs Case: Supreme Court Hands Industry 2nd Major Victory in 2 Weeks
WASHINGTON, DC, June
21, 2007 – The Securities Industry and Financial Markets Association
(SIFMA) applauded the Supreme Court’s 8-1 decision today in the case of Tellabs Inc. v. Makor Issues & Rights
Ltd., which endorsed a high
pleading standard for class-action securities lawsuits. The case is the second victory in two weeks
for investors and the industry, following the Credit Suisse v. Billing
decision, which immunized securities underwriting practices from civil
antitrust liability.
“Twice in two
weeks, the Supreme Court has correctly repelled overly aggressive trial
attorneys. Limiting their ability to
drag American businesses before a judge based only on speculative allegations
unclogs the courts, saves American shareholders money and allows our industry
to focus on innovation and growth,” said Marc Lackritz, president and CEO of
SIFMA. “This decision reinforces legislation that was originally designed to
curb nuisance filings and other vexatious litigation. Today’s important decision lends certainty and uniformity to the
pleading standards in this area. Certainty
and uniformity benefit everyone – investors and firms alike.”
In December 2006,
SIFMA filed a joint amicus brief with the Chamber of Commerce in this case.
That brief argued that low
pleading standards in securities fraud cases would encourage abusive suits that
the Private Securities Litigation Reform Act (PSLRA) set out to prevent, and those
low standards would make it more difficult to get early dismissal for suits
based on speculative allegations of fraud
(known as scienter allegations).
The brief is
available at:
http://www.sifma.org/regulatory/briefs/Tellabs_20Amicus.pdf
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The Securities Industry and Financial Markets Association brings together the shared interests of more than 650 securities firms, banks and asset managers. SIFMA's mission is to promote policies and practices that work to expand and perfect markets, foster the development of new products and services and create efficiencies for member firms, while preserving and enhancing the public's trust and confidence in the markets and the industry. SIFMA works to represent its members’ interests locally and globally. It has offices in New York, Washington D.C., and London and its associated firm, the Asia Securities Industry and Financial Markets Association, is based in Hong Kong.