The Supreme Court has ruled 5-4 that Janus Capital Group is not liable for false statements in a prospectus for the Janus Investment Fund made at the time of the 2003 market-timing scandal.

Citing federal securities law, the court said the statements were made by the fund, not the investment advisor.

“We conclude that Janus Capital Management cannot be held liable because it did not make the statements in the prospectuses,” wrote Justice Clarence Thomas.

The case, Janus Capital Group v. First Derivative Traders alleged that Janus’ stock fell nearly 25% in September 2003 due to the market timing scandal, and that Janus gave the misleading impression that it would take steps to prevent market timing.

The Supreme Court’s decision reversed a ruling by the United States Court of Appeals for the Fourth Circuit, which had decided the class-action lawsuit could move forward. Experts say the decision will limit the ability of other shareholders to file suit against investment advisors.

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