The U.S. Supreme Court has agreed to rule on whether a federal appeals court properly decided to dismiss a series of state class actions charging mutual fund companies with engaging in market timing.
The mutual funds were unsuccessful in getting a federal district court to throw out the class actions by claiming that federal law bars investors from suing the funds. However, on appeal, one of four federal appellate courts accepted some of the cases for review but sent the rest back to the lower federal court where they were dismissed. Now the investors were able to persuade the High Court to review the federal district court’s decision to order the cases back to state court, where they are not subject to federal appeals court review.