The U.S. Supreme Court on Monday left intact lower court rulings allowing certain state-chartered banks to trade securities and keeping in India a lawsuit against Union Carbide stemming from the 1984 Bhopal disaster.
State-chartered banks that are not members of the Federal Reserve System were permitted to continue trading stocks and bonds when the Supreme Court refused to hear an appeal to a lower court ruling by two trade groups.
The U.S. Circuit Court of Appeals in Washington, in keeping with a recent deregulatory trend, ruled last April that the Federal Deposit Insurance Corp. didn't violate the Glass-Steagall Act of 1933 by permitting such banks to move into the securities business.
The Depression-era law was passed by Congress in response to a wave of bank failures many saw as the result of stock market speculation by the banking industry.