William S. Lerach, a prominent plaintiffs’ attorney, met with SEC staff members last week to try to convince the agency to support investor lawsuits filed against banks accused of helping corporate executives engage in fraud.
Recently, the U.S. Supreme Court agreed to hear a case that will look at the liability of secondary parties, including lawyers, bankers, and accountants, who did not say anything even though they knew that corporate officials were misleading shareholders. The case involves Charter Communications, a cable television provider, and is said to be the most important securities law case to reach the Supreme Court in twenty years. The decision could have major consequences and will affect investors’ ability to recover losses from companies that have engaged in fraud.
Trade groups that want to limit banks’ liability and consumer advocates that want to expand it are working to garner support for their sides. Both sides are also courting federal and state regulators.
Former agency officials and plaintiffs’ lawyers have expressed worries regarding a court brief related to another securities dispute that the agency turned in this year. The commission is considering industry-supported proposals that could decrease the number of shareholder lawsuits by encouraging investors to pursue arbitration as an alternative.
Note that “banks” includes “investment bankers” such as Merrill Lynch, Morgan Stanley, Smith Barney, etc. Once again, it is apparent that the SEC, which was formed and has a duty to protect investors, instead has as its agenda the goal to protect Wall Street and white collar criminals. Mr. Lerach is grandstanding here in order to shine a light on the SEC prior to its predictable action against investors. He knows – we all know – that he will get nowhere with these Bush appointees. Never has the phrase been more appropriate that “the fox has been put in charge of the henhouse!”
If you are an investor that needs an experienced law firm to help you recover your losses because you have been a victim of securities fraud, contact Shepherd Smith and Edwards today. Our firm has successfully helped thousands of investors over the years.
All Sides Seek SEC Support in Liability Case, Washington Post, April 21, 2007
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