The 9th U.S. Circuit Court of Appeals decided last week not to intervene in a highly publicized securities fraud class action against Network Associates Inc. With an order denying mandamus , the case now goes back to Northern District Judge William Alsup, while the law behind his controversial ruling granting lead plaintiff status to a small, local investor remains untested by higher courts.

Alsup’s order was hailed as groundbreaking by some and assailed by others. The judge granted lead plaintiff status to a retired attorney claiming $30,000 in stock losses over the protests of larger, institutional investors who claimed they lost millions. Before Alsup’s ruling, judges routinely conferred lead plaintiff status to the investors who suffered the greatest losses.

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