WASHINGTON (AP) — The U.S. Supreme Court said Wednesday that class-action lawsuits from investors who lost billions of dollars in a former Texas tycoon's massive Ponzi scheme can proceed.
The justices on Wednesday ruled against individuals, law firms and investment companies -- which wanted the lawsuits dismissed -- that allegedly aided R. Allen Stanford's fraudulent operation.
Federal law says class-action suits related to securities fraud cannot be filed under state law, as these suits were. But a federal appeals court said these could move forward because the main part of the fraud involved certificates of deposit, not stocks and other securities.
The high court agreed in a 7-2 decision.
©2014 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.