Just when you thought it was safe to read about something else on this blog, here are a few more pieces on the Stoneridge (a.k.a. Charter Communications) case pending before the U.S. Supreme Court.
(1) The Harvard Law School Corporate Governance Blog has a post with further speculation (see here) about whether Justice Alito could be the deciding vote. The post also discusses how the granting of cert in the related Enron’s banks case might alter the outcome.
Quote of note: “[I]f the Court grants review in Credit Suisse [the Enron’s banks case], it could well mean that Chief Justice Roberts and Justice Alito are inclined to take a narrow view of primary liability, and that The Chief Justice will be in a position to assign the opinion to a wavering Justice Alito. If Credit Suisse is granted, look for the case to be a 5-4 decision, with liability under Section 10(b) not extended to vendors and investment bankers, even where they know the transaction is a sham and will be used to effect a financial fraud.”
(2) The Los Angeles Times ran an editorial on Wednesday urging the SEC to support the investor plaintiffs in the Stoneridge and Enron’s banks cases.
Quote of note: “So far, the SEC has remained silent. But with its mandate to ‘maintain fair, orderly and efficient markets and facilitate capital formation,’ the SEC is uniquely suited to speak out when legal interpretations undermine confidence in the stock market’s fairness.”
(3) Meanwhile, the Washington Examiner has an op-ed urging the SEC to take the opposite position.
Quote of note: “The SEC’s support, expressed through a U.S. government friend-of-the-court brief in Stoneridge, would well tip the balance in the Supreme Court. For the sake of our capital markets and American shareholders, let’s hope the commission does the right thing. The SEC’s mission of ‘investor protection’ cannot be achieved by further empowering plaintiffs’ lawyers.”
The 10b-5 Daily 