Sorting out securities litigation rulings

Although a recent decision in the Ninth U.S. Circuit Court of Appeals could shield biotech companies from certain securities litigation lawsuits, the decision is at odds with other Circuit Court rulings. Additionally, resolving the jurisdicational differences will potentially have to wait until the U.S. Supreme Court's 2000-2001 session, assuming that a larger panel of Ninth Circuit judges does not overturn the decision upon appeal.

The court, located in San Francisco, dismissed two shareholder suits against Silicon Graphics Inc. (Mountain View, Calif.) alleging that fraudulent and misleading statements were made in 1995 to inflate the company's stock. The Ninth Circuit stated that shareholder litigation suits must provide detailed evidence of deliberately reckless or conscious misconduct...