A three-judge panel of the
In Benak v.
The court said that it understands that a mutual fund investor usually has "less reason to monitor the health of companies in which he or she is invested," and is "less likely to have accurate, contemporaneous information regarding where his or her money is invested."
"Although we cannot say that inquiry notice was triggered as a matter of law prior to Enron's bankruptcy, [the investors] were surely on notice shortly thereafter," wrote Circuit Judge Maryanne Trump Barry. "The combination of [the investors'] knowledge that Alliance had Enron holdings as of the prior summer, the news reports regarding Enron in the fall of 2001, the company's highly publicized bankruptcy, the publicity in the immediate aftermath of the bankruptcy referencing Alliance' Enron-related losses, and the filing of [a derivative suit] placed appellants on the inquiry notice prior to Dec. 13, 2001," the judge ruled.
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