United States Supreme Court
494 U.S. 56 (1990)
The Farmer’s Cooperative of Arkansas and Oklahoma Co-op (Co-op) issued notes to both members and non-members of the co-op, at an interest rate higher than that offered by local banks. The Co-op was audited by Ernst & Young (defendant), who declared that the Co-op’s assets were sound enough to issue said notes. However, in 1984, the Co-op filed for bankruptcy. The holders of the notes issued by the Co-op (Reves) (plaintiff) brought suit against Ernst & Young, arguing that Ernst & Young violated the antifraud provisions of the 1934 Act. The district court ruled in favor of Reves. Ernst & Young appealed, with the Eighth Circuit Court of appeals reversing the district court’s judgment. Reves then petitioned for certiorari to the United States Supreme Court.
Rule of Law
Holding and Reasoning (Marshall, J.)
Concurrence (Stevens, J.)
Dissent (Rehnquist, C.J.)
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