Posts in SLUSA.

A unanimous Supreme Court today held that "covered class actions" over exchange-traded securities are not removable from state courts under SLUSA when they assert only '33 Act claims.

The Court held the removal provisions of the Act are in aid of its state-law claim bar (removed to ensure dismissal), and do not otherwise affect the long-standing grant of concurrent jurisdiction for '33 Act claims.

"Under our reading of SLUSA, all covered securities class actions must proceed under federal law; most (i.e., those alleging 1934 Act claims) must proceed in federal court; some (i.e ...

Posted in: SCOTUS, SLUSA

In 1995, the Private Securities Litigation Reform Act ("PSLRA") was passed to limit frivolous and unwarranted securities lawsuits. 15 U.S.C. §78u-4. While private securities litigation is an indispensable tool in which defrauded investors can recover their losses, such litigation has led to nuisance filings, targeting of deep-pocket defendants, and vexatious discovery requests in attempts to, among other things, extort large settlements. See Merrill Lynch, Pierce, Fenner & Smith Inc. v. Dabit, 547 U.S. 71 (2006). To combat these actions, the PSLRA changed the pleading ...

Posted in: SLUSA
The familiar "in connection with the purchase or sale" securities-litigation requirement may not be unlimited in its breadth, after all. On February 26, the US Supreme Court pulled up short defendants in litigation by investors in the bank CDs at the heart of Allen Stanford's Ponzi scheme. In four separate class actions (two in USDC-NDTX and two removed from Louisiana state court, but consolidated by the JPMDL) investors brought state-law securities and related claims - apparently hoping to avoid stricter Federal-law pleading requirements, and limits on private ...
Posted in: JPMDL, PSLRA, SLUSA
Tags: JPMDL, PSLRA, SLUSA
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