Peter Stris’s second Supreme Court argument of the Term was in Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Manning, a case that posed challenging questions of securities law and federal jurisdiction.
At issue was whether Escala Group shareholders burned by a sudden $800 million decline in the company’s value could sue Merrill Lynch and other financial defendants in state court. The plaintiffs alleged the sharp drop in Escala’s value was caused by, among other things, the defendants’ “naked” short selling, in violation of New Jersey law. The plaintiffs filed suit in the New Jersey courts, but the defendants argued that the Securities Exchange Act of 1934 required that claims like those of the plaintiffs must be heard in federal court.
The case is widely viewed as the most important securities case of the Term. Lead counsel for Merrill Lynch and the defendants was Jonathan Hacker of O’Melveny & Myers.
Read our case study:
Merrill Lynch v. Manning: Securities Victory
Related press coverage:
U.S. Supreme Court Hears Oral Argument In ‘Naked’ Short-Selling Case (Lexis Legal News, December 11, 2015) (subscription required)
Supreme Court hears arguments in securities lawsuit jurisdiction case (Pensions & Investments, December 1, 2015)
Justices Wary Of Moving ‘Naked Shorts’ Suit Out Of NJ Court (Law360, December 1, 2015) (subscription required)
Groups Tell Justices To Send Naked Short-Selling Suit To NJ (Law360, November 9, 2015) (subscription required)
Justices’ Business Docket Heating Up Next Term (National Law Journal, July 8, 2015) (subscription required)
High Court To Hear Merrill Lynch Naked Short Selling Suit (Law360, June 30, 2015) (subscription required)
Merrill Lynch Blasted For High Court Bid In Short-Selling Suit (Law360, June 12, 2015) (subscription required)