The Washington Post had an interesting article over the weekend on attempts by the plaintiffs’ bar to convince the SEC to support their position in the Charter Communications case. The case will be heard by the U.S. Supreme Court next term and addresses the issue of scheme liability.
There is good reason for the plaintiffs’ bar to think that the SEC may be sympathetic. In 2004, the SEC filed an amicus brief in a 9th Circuit case urging the court to adopt a broad test for determining when a person’s conduct as part of a scheme to defraud constitutes a primary violation that can create securities fraud liability.
Quote of note: “The approach that state and federal regulators advance in friend-of-the-court briefs may be particularly influential, and both sides are courting the regulators. SEC officials have not yet tipped their hand. But plaintiffs’ lawyers and former agency officials expressed concern about a court brief in another securities dispute the agency submitted this year.”
The 10b-5 Daily 