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

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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