Makes it sound almost as if this was some arbitrary edict issued by a Monarch.
Um... it's a news item written by a journalist who is reporting on a judgment in a court of law.
I guess they broke some law?
With the exception of Louisiana, the common law applies even in your own country. Apart from which, I'm sure that even the US must have some equivalent of our Trade Practices Act (1974) (Cwlth) forbidding misleading and deceptive conduct
Justice Steven Rares has ruled that the parties are entitled to compensation but the amount has yet to be finalised.
They had sought compensation for losses incurred on investments they made on advice from Grange Securities, which was bought by Lehman Brothers Australia in 2007.
The investments had exposure to the housing market collapse in the United States.
Members of the group were advised by Lehman's Australian arm before buying subprime mortgage-related derivatives or collateralised debt obligations (CDOs) branded locally as federation notes.
This was prior to 2007 when America's housing sector began to crash, sparking a meltdown on Wall Street.
Justice Rares found the investors were not properly advised of the risks involved in highly complex financial products.
He said councils were often targeted by Grange Securities because they had ready access to large sums of money for investment, but the the "high risk" nature of the investments made them unsuitable for local councils.
"I have found that Grange engaged in misleading and deceptive conduct in breach of [the act] when it promoted the SCDOs to the councils in terms of suitable investments," he said.