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President Bush Sides with Corporations over Investors
Move Represents ‘Presidential Pardon for Enron Defendants’
June 13, 2007 (Washington, DC)— President Bush betrayed investors
and damaged American markets by pressuring Solicitor General Paul
Clement to steer clear of a pending U.S. Supreme Court case that may
still provide shareholders with enhanced tools to hold negligent CEOs
accountable for misconduct.
“This outrage is a presidential pardon for corporate wrongdoers,”
said Jon Haber, chief executive officer of the American Association
for Justice. “It clearly establishes beyond any doubt that President
Bush has no regard for small investors and will do everything within
his broad powers to ride to the rescue of his corporate cronies.”
The case, Stoneridge Investment v. Scientific-Atlanta, turns on the
question of whether investors can pursue lawsuits to recover investment
losses from investment banks, attorneys, accountants and other parties
believed to have been involved in a fraudulent scheme involving their
corporate clients. The Supreme Court is expected to consider the case
during its next term. The outcome could determine whether victims
of the Enron scandal can proceed with a $40 billion lawsuit against
investment banks that dealt with Enron.
The Securities and Exchange Commission, which regulates the markets
and is led by former Republican Congressman Christopher Cox, urged
the solicitor general, who represents the administration’s views
before the Supreme Court, to file a brief in support of investors.
Clement declined, after receiving word the president was opposed.
Now the administration has 30 days to decide whether to support the
defendant corporations or not participate at all.
“The SEC did the right thing in this case – it moved
to protect investors from scams like Enron,’’ Haber said.
“But the president has decided to place the profits of corporate
CEOs ahead of the interests of the American people.”
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As the world's largest trial bar, AAJ (formerly known as the Association of Trial Lawyers of America) promotes justice and fairness for injured persons, defends the constitutional right to trial by jury, and strengthens the civil justice system through education and disclosure of information critical to public health and safety. Serving members worldwide, AAJ provides attorneys with the information and professional assistance they need to serve clients successfully and protect the democratic values of the civil justice system. Visit http://www.justice.org
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