Wednesday we reported that law firms might rest a little easier in the wake of a decision by Manhattan federal district court judge Gerard Lynch in the Refco securities class action. Lynch dismissed Mayer Brown and partner Joseph Collins as defendants, concluding that the Supreme Court’s recent ruling in Stoneridge gave the plaintiffs no basis to sue them, even if they had engaged in fraud.
Well, don’t sleep too soundly. It’s now apparent that Lynch was bothered by his decision, and — in a revised version of the original ruling — is urging Congress to change the law. After his ruling was first published, Lynch issued a corrected opinion with a lengthy new footnote that faults the legal system for failing to provide shareholders the right to sue guilty accomplices. (It’s footnote 15 on page 25).
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