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A panel of the U.S. Court of Appeals for the Second Circuit split yesterday over the scope of a federal law designed to funnel securities cases to the federal courts. Deciding a case of first impression, two judges gave an expansive interpretation to the Class Action Fairness Act of 2005. The majority ruled that an action over the failure of a company to disclose it was insolvent should be heard in federal court, even though it was brought under New York state's consumer fraud law and did not involve nationally traded securities.
May 15, 2008 at 12:00 AM
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