On September 18, the U.S. Court of Appeals for the 11th Circuit, in a case closely watched by bond insurers, other credit enhancers and issuers, conduit borrowers, and underwriters of insured or credit-enhanced debt, ruled that a bond insurer lacks standing to bring securities fraud claims in connection with the information on which it bases its decision to insure a municipal bond issue. The appellate court's opinion, which vacated the same judicial panel's May 31, 2006 opinion in the same case that the bond insurer did have standing, seems to be based on unusual or misunderstood facts, and is unlikely to be the last word in this controversy.
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