Breaking Legal News - POSTED: 2008/01/18 14:47
A $40 billion lawsuit by Enron investors against several banks for orchestrating financing deals for the now-defunct energy trader is not dead, despite a recent Supreme Court decision that helps protect such third parties.
In fact, some lawyers who represent investors argue the high court decision involving cable company Charter Communications and two of its suppliers, made a clear distinction that justifies hearing the Enron case.
The Supreme Court ruled 5-3 that shareholders cannot sue third parties in securities fraud cases, unless investors relied on their statements or representations when making investment decisions.
Stoneridge Investment Partners, on behalf of Charter shareholders, had accused the two suppliers of scheming to inflate company revenues in 2000.
Lawyers for investors point to sections of Justice Anthony Kennedy's majority opinion, which they say makes a distinction between third parties involved in the goods and services arena and those involved in the investment sector.
"He repeatedly made that distinction. That distinction distinguishes Enron from Stoneridge," said Pamela Gilbert, a consultant for the American Association for Justice, the world's largest trial bar association.
"Stoneridge involves a customer relationship. In Enron, the major wrongdoers are the investment banks involved in the financial transactions," Gilbert said.