Top court kills investor suit over fraud
Associate Supreme Court Justice Clarence Thomas said in a recently decided case reported June 13, 2011, that the law doesn't allow investors to sue over fraudulent information in investment prospecti. (Sept. 29, 2009) Credit: Getty Images
The U.S. Supreme Court has cut off a lawsuit by investors against Janus Capital Group seeking to hold the company liable for allegedly false statements in some Janus mutual fund documents.
The court's 5-4 ruling Monday reversed an appeals court decision that allowed the lawsuit to go forward.
At issue is whether the adviser to a mutual fund can be held financially responsible for false statements in the fund's prospectus.
Justice Clarence Thomas said that securities law does not permit that kind of lawsuit. The court was ideologically divided, with the four liberal-leaning justices saying the suit should be allowed.
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