Compliance October 20, 2003

Supreme Court Turns Away America West's Securities Fraud Suit

October 20, 2003 (PLANSPONSOR.com) - Refusing to hear a case that would have allowed the justices to set standards for mass lawsuits alleging securities fraud, the US Supreme Court has turned back a America West Holdings Corp request for appeal.
Reported by

>The original lawsuit was brought by the Number 84 Employer Teamster Joint Council Trust Fund and accused the company’s top brass of concealing a Federal Aviation Administration (FAA) investigation from the public.   This was in an attempt to maintain the airline’s high stock price long enough for large shareholders in the company to sell more than $600 million in stock, according to a Phoenix Business Journal report.

>Originally filed in US District Court in Arizona, the suit was initially thrown out by a trial judge who ruled the union failed to show it had a case under federal securities laws.   However, o n appeal, the US 9th Circuit Court of Appeals in San Francisco reversed that ruling with a split decision that would allow the lawsuit to go forward.

>The high court was asked to clarify if people who sue must prove that stock prices were hurt, since when the news of the maintenance investigations surfaced, America West’s stock did not initially decline. With the denial to hear the case though, both the 9th Circuit and the US Supreme Court have issued rulings not in America West’s favor.

The case is America West Holdings v. Number 84 Employer-Teamster Joint Council Pension Trust Fund.

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