Proskauer Rose LLP v. Troice
Holding
The Securities Litigation Uniform Standards Act of 1988 does not preclude the plaintiffs' state-law class actions contending that the defendants assisted in perpetrating a Ponzi scheme by falsely representing that uncovered securities that plaintiffs were purchasing were backed by covered securities.
Judgment
Affirmed, 7-2, in an opinion by Stephen G. Breyer on Feb 26, 2014. Justice Thomas filed a concurring opinion. Justice Kennedy filed a dissenting opinion, in which Justice Alito joined.
Disclosure: Goldstein & Russell, P.C., whose attorneys work for or contribute to this blog in various capacities, serves as counsel to the respondents in this case.
Issue: (1) Whether the Securities Litigation Uniform Standards Act of 1998 (“SLUSA”), 15 U.S.C. §” 77p(b), 78bb(f)(1), prohibits private class actions based on state law only where the alleged purchase or sale of a covered security is “more than tangentially related” to the “heart, crux or gravamen” of the alleged fraud; and (2) whether the SLUSA precludes a class action in which the defendant is sued for aiding and abetting fraud, but a non-party, rather than the defendant, made the only alleged misrepresentation in connection with a covered securities transaction.
Recommended Citation: Proskauer Rose LLP v. Troice, SCOTUSblog, https://www.scotusblog.com/cases/proskauer-rose-llp-v-troice/