NAM President John Engler in a column published in today’s Washington Post, , “Washington’s Biggest Decision.”
For America’s global economic strength, Washington’s biggest decision in 2007 will not be made in Congress or the White House but in the Supreme Court, in a case, Stoneridge v. Scientific-Atlanta, that one journalist has called “the most important securities case in a generation.” Yet to read the media coverage, you would never know how much is at stake, not just for U.S. companies but for every investor.
Since the first federal securities legislation in the 1930s, the law has drawn a line between those who commit securities fraud and everyone else. If you violate federal rules, you may be the target of a private lawsuit. Not your outside accountants or financial advisers. Not any company with which you did business. You.
Without this sharp, clear line, unscrupulous lawyers would have a hunting license to stalk any company that did any business with any publicly traded firm found guilty of violating U.S. securities law, if the company could in any way be charged with knowing, sort of knowing or “recklessly” not knowing of the fraud. It is this line that the high court is being asked to erase.
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