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California Supreme Court Expands Securities Fraud Class Action Plaintiffs to Include Stock Holders

May 01, 2003

By William F. Sullivan and Morgan J. Miller

In 1975, the United States Supreme Court ruled in Blue Chip Stamps v. Manor Drug Stores that a plaintiff in a federal securities fraud action must have actually bought or sold stock in order to sustain a cause of action. The decision specifically disallowed claims in federal court by persons asserting they were wrongfully induced to hold stock instead of selling it.

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Image: William F Sullivan
William F Sullivan
Senior Counsel, Litigation Department
Image: Morgan J Miller
Morgan J Miller
Partner, Litigation Department