The WSJ law blog reports that Senators Arlen Specter (D-PA) Jack Reed (D-RI) and Edward Kaufman (D-DE) are pushing legislation to overturn the Supreme Court's decision in Stoneridge Investment Partners v. Scientific-Atlanta. In this case, the Supreme Court held, 5-3, that private rights of action under Section 10(b) of the Securities Act do not reach third-party actions where shareholders did not rely upon the third party's actions or statements. Section 10(b) did not create such "scheme liability," the Court held.
Stoneridge was a very significant case — easily one of the most important securities-law cases of the past ten years. Overturning it would also be quite significant. As the WSJ reports, it would "give plaintiffs lawyers — especially those who file shareholder fraud suits — a shot in the arm."
For prior VC posts on Stoneridge see here, here, and here. In addition, here is a a Federalist Society on-line debate on the decision and background materials and the webcast of a mini-conference on the case sponsored by the Center for Business Law and Regulation at Case Western Reserve University.
UPDATE: Professor Bainbridge has a lengthy post on Stoneridge and the proposed legislation here.