SEC Backs Third-Party Liability
Posted Jun 4, 2007 2:29 PM CDT
By Debra Cassens Weiss
The Securities and Exchange Commission will side with investors seeking to hold third-party bankers liable for helping boost the stock price of a failing company.
The SEC has asked the solicitor general to file papers supporting its position in Stoneridge Investment Partners v. Scientific-Atlanta Inc., the Washington Post reports.
Investors who had feared the SEC was tilting too far toward business interests are expected to applaud the decision, the Wall Street Journal (sub. req.) reports.
Securities class-action lawyer Bill Lerach was among those who lobbied the SEC to side with investors. Lerach represents Enron shareholders in a similar case, and he wants the Supreme Court to review it along with Stoneridge.
The decision comes as Lerach faces probes into payments to lead plaintiffs in class-action cases.
Lerach formerly worked for the firm now called Milberg Weiss & Bershad, which has been indicted for allegedly paying kickbacks to lead plaintiffs. He has told others that he may leave his new firm, Lerach Coughlin Stoia Geller Rudman & Robbins of San Diego.