The U.S. Supreme Court's upcoming decision on the legal standards required for bringing a securities fraud case could mean a sustained drop in directors and officers liability insurance claims, according to attorneys and insurance experts.
After hearing arguments yesterday in Tellabs Inc. v. Makor Issues & Rights, if the court reverses a decision of the 7th U.S. Circuit Court of Appeals in Chicago, the drop in securities class action filings reported for 2006 could well continue, they said.
Such a ruling would be welcome news to directors and officers insurers who cover defendants in securities suits.
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