A Supreme Court ruling in StoneRidge v. Scientific-Atlanta essentially says that third parties involved in corporate wrongdoing are not liable to investors if they did not directly mislead investors. Simply put, if you partake in corporate fraud as a third party but don't lie to investors, they can't sue you. Investors now will only be able to sue those who directly mislead them.

Third parties might include lawyers or consultants who provide services (and possibly participate in the fraud). It's easy to see how this might be important in a case such as Enron. Banks may have known of fraud at Enron and may have even helped the fraud to continue, but as long as they weren't involved in misleading investors, they might be off the hook with this ruling.

The majority opinion, authored by Justice Anthony M. Kennedy, says that the SEC is responsible for going after those who participate in corporate fraud, and that private litigants should not be the ones pursuing them.

Analysts say this decision is anti-investor, while others contend that this decision was necessary to protect the many companies that may be doing business with those engaged in fraud. The line must be drawn somewhere in determining who is responsible for fraud and misleading investors, and this ruling does so quite clearly.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.

Cisco Systems, Inc. (NASDAQ: CSCO) reports its quarterly and fiscal year earnings on Tuesday. First Call is looking for $0.35 EPS and $9.29 billion revenues. Next quarter estimates are $0.36 EPS and $9.38 billion in revenues. We may get fiscal July-2008 targets, and estimates are $1.55 earnings per share (EPS) and $39.7 billion in revenues, so 2008 expectations are an implied 16.5% gain in EPS and a 14% gain in revenues.

Cisco's shares have held up quite well outside of today, with shares trying to remain above $30.00. But the challenge of the $30.00 stock hurdle goes back to January 2004. Now it has Scientific-Atlanta, Webex, and others under its umbrella. In fiscal 2004 the networking giant posted $22.04 billion in revenues and it is expected to have roughly $34.75 billion for this fiscal year (and estimated at $39.7 billion for 2008). The company has also been retiring stock in a big way, even though this last buyback announcement right before earnings seems odd timing.

The average analyst price target is now around $32.00 to $33.00. Back in January, we ran some forward valuations and the scenario that could give Cisco shares a $34.00 stock price mid-year. It is not fair to use options pricing as an estimate several days ahead of the event with erosion of time value and harder in a volatile market, but as of today it appears that options traders are prepared for the stock to move up to 3% in either direction. Cisco was also one of Jim Cramer's TOP PICKS FOR 2007.

Here is a May 8 preview I gave if you want to see any comparisons to then. Shares ended the last quarter under $27.00, so the stock is up about 11% since then ahead of today's sale.

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.

Synopsis: Cisco (NYSE:CSCO) continues to dominate the router and switch sector -- the equipment that links the Internet (Ethernet, Gigabyte Ethernet, ATM technologies). Other products include IP telephony equipment and network services. However, surging Internet growth in both the eastern and western hemispheres is the value-added story here, the key driver of what analysts surveyed by Reuters project will be 15% revenue growth to $34.1 billion in 2007.

True, operating margins may decline slightly to 65% this year, as competitors attempt to shorten Cisco's substantial lead, but the company's acquisition of Scientific-Atlanta positions Cisco to be a player in the emerging end-to-end video distribution segment -- which will add another solid revenue stream to Cisco's arsenal, as video broadcasting on the web expands.

Investment Analysis: Cisco is a high-risk stock not suitable for conservative-risk or moderate-risk investors. However, if your portfolio can tolerate a high-risk growth stock, considerable buying Cisco in four stages: 25% of your position for four consecutive weeks. Cisco's PE is high at 25, and the stock is near a 52-week high, so the stock is vulnerable to a pull-back in the months ahead, but that fact does not change Cisco's robust outlook.