Lawyers at Risk? Proposal Would Overturn Stoneridge Bar to Aiding and Abetting Suits
A proposed amendment to a bill to reform financial regulations would allow lawsuits against lawyers and others who aid and abet corporate fraud.
The amendment would essentially overturn Stoneridge Investment Partners v. Scientific-Atlanta, the Washington Post reports. The 2008 Supreme Court decision held that third parties are not liable in private lawsuits for participating in corporate wrongdoing if they did not directly mislead investors. A federal appeals court cited Stoneridge in April when it held that Mayer Brown and one of its partners were not liable in a shareholder suit filed over the bankruptcy of brokerage firm Refco Inc.
The amendment would impose liability on “any person that knowingly provides substantial assistance” to individuals and companies committing securities fraud, the story says.
