WASHINGTON, D.C.—The United States Chamber of Commerce today applauded the Supreme Court’s decision to halt the expansion of securities liability cases in Stoneridge Investment Partners v. Scientific-Atlanta, Inc. The Chamber filed an amicus brief in August warning against expanding securities liability in cases brought by private parties to include a theory called “scheme liability.”
“The high costs of frivolous litigation in the U.S. are driving public companies to list in Europe and elsewhere putting future investments in our markets at risk,” said Tom Donohue, Chamber president and CEO. “This decision, coupled with last year’s indictment of some of America’s biggest class action trial lawyers for large-scale fraud and corruption charges, is a positive step for investors and all those concerned about America’s competitive disadvantage in the global marketplace.”
In a brief filed in August, the Chamber’s National Chamber Litigation Center (NCLC) explains that “scheme liability” places pressure on businesses to incorporate the cost of yet more litigation risk into every transaction and provides yet another reason for foreign companies to refuse to list on American exchanges or to do business with American companies.
“This decision is pro-investor and pro-retiree, because with fewer frivolous lawsuits driving stock prices down, it will help shore up the life-savings of the tens of millions of main street American families who participate in the markets,” stated Robin Conrad, executive vice president of the National Chamber Litigation Center (NCLC). “Employing the blunt tool of private securities fraud actions threatens to undermine efficient business conduct without addressing underlying issues. Instead, as the Court noted today, Congress has placed enforcement authority in a federal regulatory agency, the SEC, to punish aiders and abettors.”
NCLC, the public policy law firm of the U.S. Chamber of Commerce, is a membership organization that advocates fair treatment of business in the courts and before regulatory agencies. The U.S. Chamber of Commerce is the world’s largest business federation representing more than 3 million businesses and organizations of every size, sector, and region.