Stris & Maher’s latest U.S. Supreme Court win vindicated the rights of state courts to hear civil cases involving financial-market misconduct. Stockholders of the company Escala lost $800 million in a sudden stock drop. Several large shareholders who had suffered more than $50 million in losses sued Merrill Lynch and other financial firms for causing the decline through improper “naked” short-selling and other wrongdoing. Although all the plaintiffs’ claims sounded in state law, the defendants sought to remove the matter to federal court. The Supreme Court disagreed. In an 8-0 decision, the Court affirmed longstanding jurisdictional principles and ruled the case should proceed in state court.
Our firm’s case study:
Merrill Lynch v. Manning: Securities Victory
Related press coverage:
Supreme Court Shields Shareholder Access To State Court (Law360, May 16, 2016) (subscription required)
Justices Say Federal Securities Laws Don’t Limit State Suits (Law360, May 16, 2016) (subscription required)
Supreme Court Says No to Federal Jurisdiction in Short-Selling Spat (Thompson Reuters, May 16, 2016)
SCOTUS Send Merrill Lynch Case to NJ State (Courthouse News Service, May 16, 2016)