A lawsuit filed by five southeastern Wisconsin school districts against several financial firms the districts charge misled them over the safety of a $200 million investment involving synthetic CDOs will be heard at the state court level, a federal judge has ruled.

The ruling from Rudolph T. Randa, chief judge of U.S. District Court for the Eastern District of Wisconsin, on Friday marked a victory for the schools, which believe state securities and fraud laws are stricter and the penalties tougher.

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