The U.S. Supreme Court has shot down an investor class action suit against Merrill Lynch claiming the brokerage used misleading research that manipulated stock prices. The plaintiff, former Merrill Lynch broker Shadi Dabit, said the reports caused the firm to lose customers, which ultimately lowered the value of Dabit’s own investments in Merrill Lynch recommended securities. In an 8-0 ruling, the justices held that a 1995 federal law restricting such investor actions prevented the suit, which was filed under Oklahoma state law.
“The magnitude of the federal interest in protecting the integrity and efficient operation of the market for nationally traded securities cannot be overstated,” wrote Justice John Paul Stevens for the Court