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Article: The Fifth Circuit Rules On Third-Party Liability For Securities Fraud; Underscores Circuit Split; Supreme Court To Review.
- Article from:
- Mondaq Business Briefing
- Article date:
- April 17, 2007
- Author:
CopyrightCOPYRIGHT 2007 Mondaq Ltd. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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By: George Gowen, Esq. and James Lare, Esq.
The United States Fifth Circuit Court of Appeals recently issued an opinion concerning the liability of financial services companies and other vendors for their clients' alleged securities fraud. The case, Regents of the University of California v. Credit Suisse First Boston (USA), Inc., was an effort by shareholders of Enron Corporation to hold certain of Enron's banks (Credit Suisse First Boston, Merrill Lynch & Co., Inc., and Barclays Bank PLC) liable for securities fraud, under Rule 10b-5, for knowingly engaging in transactions with Enron that enabled it to misstate its financial condition. With Enron's assets long ...