Welcome!

News Feed Item

In Stoneridge Decision, Supreme Court Affirmed Private Right of Action for Deceptive Conduct Against Secondary Actors, But Unduly Stringently Defined When Such Liability Exists, Shareholder Advocates Say

In Stoneridge Decision, Supreme Court Affirmed Private Right of Action for Deceptive Conduct Against Secondary Actors, But Undul

WASHINGTON, Jan. 16 /PRNewswire-USNewswire/ -- The National Association of Shareholder and Consumer Attorneys (NASCAT) said the Supreme Court's January 15 Stoneridge decision did not shut the door to liability for secondary actors who commit primary violations in connection with corporate securities fraud. While a five Justice majority in Stoneridge Investment Partners, LLC v. Scientific-Atlanta, Inc., et al., No. 06-43 found that the specific linkage between the secondary actors and the fraud in that case was too remote for them to be held liable to shareholders for fraud, it recognized instances where such liability would be appropriate.

"We are pleased that the Supreme Court reaffirmed that Section 10(b) liability extends to secondary actors who play a primary role in corporate fraud schemes," said Carol Gilden, NASCAT's president. "The Court also affirmed that under circumstances different from those in the Stoneridge case, secondary actors -- which in certain cases could include accountants, bankers, lawyers and others -- may continue to be found liable for deceptive conduct. Nonetheless, the Court imposed an overly restrictive view of the circumstances under which such liability may exist, drawing an artificial distinction between whether a secondary actor's wrongful conduct took place in the investment sphere as opposed to that of ordinary business operations."

In the underlying suit, Stoneridge Investment Partners and other shareholders in Charter Communications Inc., a national cable TV and internet service provider, alleged that two of Charter's equipment suppliers, Scientific-Atlanta, Inc. and Motorola Corp., knowingly engaged with Charter executives in a scheme to inflate revenues reported to investors on Charter's financial statements. Scientific-Atlanta and Motorola have each paid substantial fines to the SEC to settle similar charges of fraudulent conduct in the falsification of financial statements issued to shareholders of another cable company, Adelphia Communications. In addition, two Charter executives have been sentenced to over a year in prison for their role in creating the false paper trail for, and cover up of, the sham transactions at issue in Stoneridge.

"While not disputing investors' factual allegations, the Supreme Court said in effect that the roles played by Scientific-Atlanta and Motorola, under the particular facts in this case, were too remote from the wrongdoing to be held liable to Charter's investors," Ms. Gilden continued. "However, the fraud could not have occurred without the active, knowing participation of these actors -- each of whom engaged in conduct that was inherently deceptive itself, not ordinary business acts that merely aided the fraud -- and we agree with Justice John Paul Stevens who, writing for the three dissenting Justices, said the Court's view was 'unduly stringent' in relieving them from liability."

"We also agree with Justice Stevens and the dissent that, contrary to the concerns articulated by the majority, scheme liability for secondary actors would not shift securities offerings to foreign markets or harm U.S. competitiveness," Ms. Gilden added. "But, rather, as the dissent noted: 'investor faith in the safety and integrity of our markets is their strength. The fact that our markets are the safest in the world has helped make them the strongest in the world.' "

The National Association of Shareholder and Consumer Law Attorneys is a nonprofit organization comprised of about 100 law firms representing consumers and investors - including pension funds and individuals - in cases of securities fraud and other forms of "white collar" wrongdoing and criminal activity.

National Association of Shareholder and Consumer Attorneys

CONTACT: Jeff McCord of McCord & Associates Public Relations, Northern
Virginia: +1-540-364-4769, Cell: +1-540-272-6181, [email protected], for
National Association of Shareholder and Consumer Attorneys; or Carol Gilden,
President of National Association of Shareholder and Consumer Attorneys,
Chicago: +1-312-357-0370, [email protected]

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
@GonzalezCarmen has been ranked the Number One Influencer and @ThingsExpo has been named the Number One Brand in the “M2M 2016: Top 100 Influencers and Brands” by Analytic. Onalytica analyzed tweets over the last 6 months mentioning the keywords M2M OR “Machine to Machine.” They then identified the top 100 most influential brands and individuals leading the discussion on Twitter.
SYS-CON Events announced today that Grape Up will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct. 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Grape Up is a software company specializing in cloud native application development and professional services related to Cloud Foundry PaaS. With five expert teams that operate in various sectors of the market across the U.S. and Europe, Grape Up works with a variety of customers from emergi...
The 20th International Cloud Expo has announced that its Call for Papers is open. Cloud Expo, to be held June 6-8, 2017, at the Javits Center in New York City, brings together Cloud Computing, Big Data, Internet of Things, DevOps, Containers, Microservices and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding business opportunity. Submit your speaking proposal ...
With major technology companies and startups seriously embracing IoT strategies, now is the perfect time to attend @ThingsExpo 2016 in New York. Learn what is going on, contribute to the discussions, and ensure that your enterprise is as "IoT-Ready" as it can be! Internet of @ThingsExpo, taking place June 6-8, 2017, at the Javits Center in New York City, New York, is co-located with 20th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry p...
SYS-CON Events announced today that Super Micro Computer, Inc., a global leader in compute, storage and networking technologies, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Supermicro (NASDAQ: SMCI), the leading innovator in high-performance, high-efficiency server technology, is a premier provider of advanced server Building Block Solutions® for Data Center, Cloud Computing, Enterprise IT, Hadoop/...
Amazon has gradually rolled out parts of its IoT offerings in the last year, but these are just the tip of the iceberg. In addition to optimizing their back-end AWS offerings, Amazon is laying the ground work to be a major force in IoT – especially in the connected home and office. Amazon is extending its reach by building on its dominant Cloud IoT platform, its Dash Button strategy, recently announced Replenishment Services, the Echo/Alexa voice recognition control platform, the 6-7 strategic...
Bert Loomis was a visionary. This general session will highlight how Bert Loomis and people like him inspire us to build great things with small inventions. In their general session at 19th Cloud Expo, Harold Hannon, Architect at IBM Bluemix, and Michael O'Neill, Strategic Business Development at Nvidia, discussed the accelerating pace of AI development and how IBM Cloud and NVIDIA are partnering to bring AI capabilities to "every day," on-demand. They also reviewed two "free infrastructure" pr...
In his keynote at @ThingsExpo, Chris Matthieu, Director of IoT Engineering at Citrix and co-founder and CTO of Octoblu, focused on building an IoT platform and company. He provided a behind-the-scenes look at Octoblu’s platform, business, and pivots along the way (including the Citrix acquisition of Octoblu).
Everyone wants to use containers, but monitoring containers is hard. New ephemeral architecture introduces new challenges in how monitoring tools need to monitor and visualize containers, so your team can make sense of everything. In his session at @DevOpsSummit, David Gildeh, co-founder and CEO of Outlyer, will go through the challenges and show there is light at the end of the tunnel if you use the right tools and understand what you need to be monitoring to successfully use containers in your...
Developers want to create better apps faster. Static clouds are giving way to scalable systems, with dynamic resource allocation and application monitoring. You won't hear that chant from users on any picket line, but helping developers to create better apps faster is the mission of Lee Atchison, principal cloud architect and advocate at New Relic Inc., based in San Francisco. His singular job is to understand and drive the industry in the areas of cloud architecture, microservices, scalability ...
Data is an unusual currency; it is not restricted by the same transactional limitations as money or people. In fact, the more that you leverage your data across multiple business use cases, the more valuable it becomes to the organization. And the same can be said about the organization’s analytics. In his session at 19th Cloud Expo, Bill Schmarzo, CTO for the Big Data Practice at Dell EMC, introduced a methodology for capturing, enriching and sharing data (and analytics) across the organization...
The explosion of new web/cloud/IoT-based applications and the data they generate are transforming our world right before our eyes. In this rush to adopt these new technologies, organizations are often ignoring fundamental questions concerning who owns the data and failing to ask for permission to conduct invasive surveillance of their customers. Organizations that are not transparent about how their systems gather data telemetry without offering shared data ownership risk product rejection, regu...
Grape Up is a software company, specialized in cloud native application development and professional services related to Cloud Foundry PaaS. With five expert teams that operate in various sectors of the market across the USA and Europe, we work with a variety of customers from emerging startups to Fortune 1000 companies.
Financial Technology has become a topic of intense interest throughout the cloud developer and enterprise IT communities. Accordingly, attendees at the upcoming 20th Cloud Expo at the Javits Center in New York, June 6-8, 2017, will find fresh new content in a new track called FinTech.
SYS-CON Events announced today that Interoute, owner-operator of one of Europe's largest networks and a global cloud services platform, has been named “Bronze Sponsor” of SYS-CON's 20th Cloud Expo, which will take place on June 6-8, 2017 at the Javits Center in New York, New York. Interoute is the owner-operator of one of Europe's largest networks and a global cloud services platform which encompasses 12 data centers, 14 virtual data centers and 31 colocation centers, with connections to 195 add...