U.S. Supreme Court Screws Investors -- Again
If Harvey Pitt -- the worst SEC chairman in recent memory -- was the Bush Administration's welcome gift to American investors, the Supreme Court decision today, undermining the right of investors to sue crummy companies, was a further reminder of how much investor rights have been eroded in this administration.
The ruling is mind-boggling in its stupidity. MarketWatch observes:
The Supreme Court's majority opinion said Scientific-Atlanta's "deceptive acts were not communicated to the public." Therefore, the petitioner "cannot show reliance upon any of respondents' actions except in an indirect chain that we find too remote for liability."In other words, a corporate management can engage in the most disgraceful acts involving third parties, but if it didn't put out a press release announcing its chicanery, it gets off the hook. This ruling is particularly toxic for Enron investors, who were victims of a wide swath of wrongdoing reaching far beyond the company.
In June, the high court gurgled forth with two similarly wrongheaded decisions, both of which similarly gave a helping hand to inept corporate management. Needless to say, none of the presidential candidates have mentioned this latest assault on shareholder rights.
© 2007 Gary Weiss. All rights reserved.
Labels: Supreme Court