Bush administration takes side of defendants in key Supreme Court case linked to Enron

[EV_Ares]

By Marcy Gordon - ASSOCIATED PRESS


WASHINGTON –The Bush administration on Wednesday took the side of defendant companies in a Supreme Court case that could determine the fate of other investor lawsuits including one stemming from the Enron scandal.
At issue in the case before the high court is whether third parties such as investment banks, accountants, lawyers or vendors can be found liable in shareholder lawsuits for scheming with companies accused of deceiving investors.

The brief filed by the Justice Department's solicitor general, who represents the administration before the court, maintains that allowing such liability would vastly overreach the securities laws against Congress' intent.

It could potentially expose the third parties “far removed from the market to billions of dollars in liability when (public companies) make misstatements to the market,” the solicitor general, Paul Clement, argued in the brief. “Congress consciously struck a balance ... by empowering the Securities and Exchange Commission alone to pursue cases of aiding and abetting” corporate fraud.

The importance of the case was underscored in mid-June when President Bush personally weighed in, telling Clement that it is important to reduce unnecessary lawsuits and that the SEC, rather than shareholders, is in the best position to sue for damages.

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http://www.signonsandiego.com/news/business/20070815-1825-enron-scotus.html

[tanyev]

1. Quelle surprise.