Barclays and other banks that are still fighting Enron-related lawsuits won a significant victory last night when America’s highest court ruled that investors could not sue third parties for helping a business to commit fraud.

In a separate case widely viewed as a proxy for remaining lawsuits against Enron’s banks, the Supreme Court ruled that a group of investors in Charter Communications could not sue another business for allegedly helping the telecoms group to inflate its revenues.

Todd Fishman, a partner at Allen & Overy in New York, said that the case would deal a significant blow to investors hoping to recover money from other banks.

Barclays, Merrill Lynch and Credit Suisse are among those yet to settle Enron-related litigation. They are accused of conspiring with Enron to defraud investors in the run-up to the energy group’s collapse in 2001. Some banks accused of the same offence, including JPMorgan and CIBC, have settled for billions of dollars.

At the time, US law on whether an investor could sue a third party for helping companies to commit fraud was unclear. Several lower courts ruled in favour of the investors, encouraging some banks to settle cases in the belief that they would lose in court.

Yesterday’s decision, in the case of Stoneridge Investment Partners v Scientific-Atlanta, is the latest in a series of business-friendly Supreme Court rulings that have gradually weakened investors’ power to recover damages for securities frauds.

The court ruled by five votes to three in favour of Scientific-Atlanta, the business accused of helping Charter Communications to commit fraud.

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