(Bloomberg News) The U.S. Supreme Court made it easier for investors to press securities fraud suits, ruling for shareholders who accuse Halliburton Co. of misrepresenting its financial condition while under Dick Cheney's leadership.

The justices today unanimously said the shareholders can sue as a group without first establishing that they lost money as a result of the alleged fraud.

The shareholders, led by the Erica P. John Fund, contend that Halliburton from 1999 to 2001 falsified earnings reports, played down estimated asbestos liability and overstated the benefits of a merger. Cheney, later the U.S. vice president, served as chairman and chief executive officer of the oilfield services provider during part of the disputed period.

The high court case concerned the standard that applies at the so-called class certification stage, not at final judgment. The Supreme Court previously said that, to get class-action status, shareholders must show they made investment decisions in reliance on a company's alleged misstatements. Shareholders can meet that test by showing the company perpetrated a so-called fraud on the market.

Chief Justice John Roberts today said that requirement doesn't mean that investors seeking class-action status must show that they lost money as a result of the alleged fraud.

"The fact that a subsequent loss may have been caused by factors other than the revelation of a misrepresentation has nothing to do with whether an investor relied on the misrepresentation in the first place," Roberts wrote in his opinion for the court.

Boies Victory

The Supreme Court ruled in 2005 that, to recover damages, shareholders ultimately must show a direct connection between a misrepresentation and a decline in stock prices.

Lower courts had been divided on the issue. In the Halliburton case, a federal appeals court had ruled that the investors couldn't sue.

The shareholders' lawyer, David Boies, contended that shareholders shouldn't have to make that showing at the class certification stage, when they haven't yet had a chance to marshal their evidence. The Obama administration backed the shareholders in the case.

Houston-based Halliburton said in a statement that it will make other arguments against class action status when the case returns to a New Orleans-based federal appeals court. The company said it hasn't set aside any money to cover potential damages "because it does not believe that loss is probable."

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