SG Files Brief in Investor Case
The U.S. solicitor general has filed an amicus brief opposing expanded liability in a case that could determine the extent of exposure for lawyers and other professionals who help companies commit securities fraud.
The government brief in Stoneridge Investment Partners v. Scientific-Atlanta rejected the views of the Securities and Exchange Commission, which voted to support investors. The U.S. Supreme Court will hear arguments in the case on Oct. 9, American Lawyer reports.
At issue is whether investors can sue third parties who participate in a fraudulent scheme with a company. A prior Supreme Court case held that only “primary violators” can be liable in investor suits; lower courts have come up with varying definitions of the term.
Solicitor General Paul Clement argues that a ruling for investors would lead to a “sweeping expansion” of such suits.