The SEC Speaks: Corporate Governance and Secondary Liability under the Antifraud Provisions

We note that the Washington Post is reporting today that the SEC has decided to ask the solicitor general to file a brief supporting the cert petition sought by shareholders in the Enron case, Regents v. Credit Suisse, 482 F.3d 372 (5th Cir. 2007).  In that case, the 5th Circuit adopted a restrictive interpretation of primary liability under Rule 10b-5, one that excluded the investment banking firms sued in connection with the collapse of the energy giant.  The Supreme Court has already taken a case that will address this issue, In re Charter (Stoneridge v. Scientific-Atlanta), 443 F.3d 987 (8th Cir. 2006).  For a discussion of the possible line up of the Justices on these cases, go to my post on the Harvard Corporate Governance Blog.  We will be writing about these cases as the week progresses.