From the wonderful crew at the SCOTUS Blog:
“The Supreme Court, in one of the most important securities law rulings in years, decided Tuesday that fraud claims are not allowed against third parties that did not directly mislead investors but were business partners with those who did. The 5-3 ruling came in Stoneridge Investment Partners v. Scientific-Atlanta (06-43).”
This case is good news for 3rd party service providers to hedge funds. If the investor does not rely on a statement directly from 3rd parties, the 3rd party cannot be held liable for fraud.