Supreme Court Limits Investors' Right to Sue in Securities Fraud Lawsuits

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The Supreme Court issued an opinion on Monday barring a group of investors from proceeding with a lawsuit against Janus Capital Group for allegedly making misleading statements in Janus mutual fund prospectuses.

The ruling overturned a decision by the Fourth Circuit Court of Appeals that had allowed the lawsuit to move forward.

At issue was whether Janus Capital Management (JCM), in its role as adviser to the Janus Investment Fund, could be held primarily liable for false or misleading statements made in the fund’s prospectus. In its appeal, Janus argued that because the mutual funds were a separate legal entity, owned by investors, neither the adviser nor its subsidiaries could be held liable in a private securities fraud action. The Supreme Court agreed.

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Published In: Business Torts Updates, Constitutional Law Updates, Consumer Protection Updates, Securities Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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