Reply #69: Third parties can't be targeted in securities fraud [View All]

[AnneD]

WASHINGTON — The Supreme Court dealt a blow Tuesday to Enron Corp. investors suing some of the fallen energy company's former bankers, ruling that stockholders can't go after third parties that participate in a securities fraud scheme.

he high court, in a case pitting Stoneridge Investment Partners against Scientific-Atlanta and Motorola, ruled 5-3 that suppliers, banks, law firms and other third parties are too far removed from investors' decision-making to be subject to shareholder lawsuits - even if those outside parties joined in fraudulent activity.

"The investors cannot be said to have relied upon any of (the third party's) deceptive acts in the decision to purchase or sell securities," Justice Anthony Kennedy wrote for the majority.

Tuesday's decision could have a devastating impact on Enron investors' $40 billion suit against three banks - Merrill Lynch & Co., Credit Suisse and Barclays - a case that has been on hold pending a decision in the Stoneridge case.

"It's a pretty anti-investor decision,"said Patrick Coughlin, an attorney for the Enron investors. "We think it could have a severe impact" on the investors' case.

http://www.chron.com/disp/story.mpl/business/5458578.html

They rigged the shell game and now you can't sue them or their friends that cooked the books for damages. What a crock. I guess that about does it for me...