The U.S. Supreme Court last week issued a decision upholding protections that shield secondary players from liability in securities fraud cases--an action welcomed by insurers providing directors and officers liability coverage.
In Stoneridge Inv. Partners, LLC vs. Scientific-Atlanta Inc. (No. 06-43), the Supreme Court, in a 5-3 decision, affirmed lower court decisions throwing out a lawsuit by shareholders of Charter Communications Inc. against two of the companies' suppliers.
The plaintiffs in the case had sued the two cable television equipment suppliers--Motorola and Scientific-Atlanta--that were allegedly involved in deceptive transactions that helped Charter, a cable television company, inflate its earnings and hide its failure to achieve its financial goals.
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