U.S. Senator Arlen Specter has introduced a bill (S. 1551) that would overturn the U.S. Supreme Court’s decision in Stoneridge Investment Partners v. Scientific-Atlanta, Inc. The bill would allow shareholders to sue individuals or firms that provide substantial assistance in a fraud. Following the 2008 Supreme Court decision shareholders have been barred from suing third parties (such as accountants and lawyers) charged with aiding a corporation that has defrauded its investors. In a press release responding to the development, Lisa Rickard, president of the U.S. Chamber Institute for Legal Reform noted that the legislation would overturn the Supreme Court precedent in the Stoneridge case, and benefit securities class action plaintiffs’ lawyers at the expense of average investors and workers. The move underscores the point that determinations of the Supreme Court are not always final. In many cases the Court’s opinions can be reversed by legislation passed by Congress. For more […]

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