Frank and Conyers File Amicus Brief in Stoneridge Case
From Congressmen Barney Frank and John Conyers
July 30, 2007
Washington, DC—Representatives Barney Frank, Chairman of the House Financial Services Committee, and John Conyers, Jr., Chairman of the House Judiciary Committee, today filed an amicus brief in the Stoneridge Investment Partners v. Scientific-Atlanta and Motorola case that is currently before the U.S. Supreme Court. Frank and Conyers filed the brief because they believe the law in the case is clear: third parties who knowingly engage in manipulative or deceptive acts as part of a scheme to defraud investors should be held liable for their actions under the federal securities laws. In the brief, the members note that if the Supreme Court decides against investors in this case, third parties will effectively be immune from suit no matter how reprehensible their conduct.
It is Congress' role to set legislative policy. Any arguments that there is a need to change the law should be directed to Congress, not the courts. This will test the intellectual consistency of conservatives who argue against any form of judicial activism, said Chairman Frank.
"The Stoneridge case will have a direct impact on the fate of the Enron victims. More important, however, is the effect the case will have on the integrity of the financial markets in general, and on whether the professionals upon whom we rely to keep our markets honest can be called to account when they betray that trust, said Chairman Conyers.
Chairman Conyers and Chairman Frank filed the brief today after the Solicitor General of the United States declined to file an amicus brief in support of investors, apparently as a result of political pressure from the White House. During an oversight hearing before the Financial Services Committee at the end of June, SEC Chairman Cox testified that the SEC had voted to ask the Solicitor General to support its legal position in favor of investors.
The Stoneridge case is scheduled to be heard by the Supreme Court on October 9, 2007. The case has garnered wide-spread attention because the outcome is likely to affect the outcome of another pending case by employees and shareholders investors in Enron who have lost billions of dollars.