UPDATE 3-Top court makes US securities fraud suits harder

(Adds comment from plaintiffs law firm, paragraphs 13-14)

By Peter Kaplan

WASHINGTON, June 21 (Reuters) - The U.S. Supreme Court on Thursday made it harder for investors to pursue securities fraud lawsuits in a big victory for network equipment maker Tellabs Inc. (TLAB.O: Quote, Profile, Research, Stock Buzz).

The high court overturned an appeals court ruling that had reinstated a class action lawsuit filed by Tellabs investors, who accused the company and former Chief Executive Richard Notebaert of misleading investors in 2000 and 2001 to keep the company's stock inflated when business was flagging.

The ruling is another blow to U.S. class-action lawyers who represent shareholders in securities fraud cases, following a Supreme Court decision earlier this week that said an antitrust case launched by investors against Wall Street underwriters could not go forward.

In the Tellabs case, a federal court in Illinois initially dismissed the lawsuit, concluding the allegations were too vague and did not raise a "strong inference" that the company intended to deceive shareholders.

The "strong inference" requirement was laid out in a 1995 law Congress designed to discourage frivolous securities fraud suits by making it easier for companies to get them thrown out of court.

The Tellabs lawsuit was subsequently reinstated by a U.S. appeals court.

The Supreme Court, by an 8-1 vote, ruled the appeals court was wrong, with the majority opinion written by Justice Ruth Bader Ginsburg.