(updated with correction)
The Supreme Court Wednesday rebuffed efforts to make stock-loss class-action lawsuits more difficult to start, siding with an investor group led by the $24.3 billion Connecticut Retirement Plans & Trust Funds against Amgen Inc.
“It's a great win for investors,” said Christopher J. McDonald, an attorney with Labaton Sucharow in New York representing the class. “It affirms what the law is and what it ought to have been all along.” Mr. McDonald said in an interview that the lawsuit will now continue at the District Court level.
In an opinion written by Justice Ruth Bader Ginsburg and supported by five other justices, the court held that proof of material harm “is not a prerequisite” to certifying a class seeking monetary damages.
The retirement system, based in Hartford, had the largest losses among a group of investors alleging that Amgen withheld information about the safety of two anemia drugs.
The Supreme Court also rebuffed a bid by the Securities and Exchange Commission to have extended time to seek civil penalties in a case brought against GAMCO Investors (GBL) Chief Operating Officer Bruce Alpert and former portfolio manager Marc Gabelli. The court held that the five-year statute of limitations clock begins when the fraud occurs, not when it is discovered.
“We are gratified that the court has … affirmed a bright-line standard for the time the government has to bring a civil penalty action,” said Gabelli attorney Lewis Liman of Cleary Gottlieb Steen & Hamilton in New York, in a statement.
The SEC filed a complaint in 2008 over alleged market timing between 1999 and 2002 in which Messrs. Gabelli and Alpert denied wrongdoing.