The Supreme Court has refused to allow InfoSpace (INSP) founder Naveen Jain to sue a stock management company and his former lawyers for allegedly bungling an insider stock trading case that resulted in a $247 million judgment against him.
WASHINGTON — The Supreme Court has refused to allow InfoSpace founder Naveen Jain to sue a stock management company and his former lawyers for allegedly bungling an insider stock trading case that resulted in a $247 million judgment against him.
The high court today refused to hear an appeal from Jain of a decision against him from the Washington state Court of Appeals.
Jain and his wife Anuradha had accused J.P. Morgan Securities; its lawyer, Wilson Sonsini Goodrich & Rosati; and Perkins Coie — which jointly represented Jain and Bellevue-based InfoSpace from 1998 to mid-2003 — of being responsible for language in InfoSpace’s initial public offering prospectus that contained errors, which ultimately played a part in the $247 million judgment against Jain.
The Jains settled the lawsuit for $105 million.
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The Jains accused the securities professionals of negligence. But lower courts have thrown out the Jains’ complaints, saying federal law prohibits lawsuits blaming security companies for risky trades.
InfoSpace was founded by Jain in 1996 as an online e-mail directory, went public two years later and grew into an Internet and wireless services juggernaut. Jain claimed InfoSpace would become the world’s first company worth a trillion dollars, but it lost more than $30 billion in shareholder value during the dot-com bust and Jain was fired in late 2002.