Securities Law

Where’s the Brief? DOJ Doesn’t File

The U.S. Solicitor General missed a midnight deadline to file an amicus brief supporting investors who want to hold third parties directly liable for helping commit accounting fraud.

The Securities and Exchange Commission had asked the U.S. Justice Department to file a brief in the Supreme Court case, Stoneridge Investment Partners v. Scientific-Atlanta Inc.

The missed deadline indicates disagreement within the government over the issue of third-party liability, the Wall Street Journal reports (sub. req.). A DOJ spokesman would not say if a brief would be filed.

In 1994, the U.S. Supreme Court ruled that third parties may not be liable for aiding and abetting a corporate fraud. Stoneridge seeks to hold third parties liable as “primary violators” for joining in transactions that allegedly helped a cable TV company inflate its financial picture.

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