Stoneridge looms large in a decision that sees Refco lawyer Joseph Collins and the firm of Mayer Brown off the hook for the commodity firm's fraud and subsequent flame-out. This would be a bit of a strikeout for Refco's shareholders and for uber-securities litigator John Coffey of Bernstein Litowitz Berger & Grossmann.

You can view the judge's dismissal order here, thanks to the AmLaw Daily. While your at it, check out Judge Gerard Lynch's juicy footnote on page 25 where he basically calls the Stoneridge decision out as a steaming pile of crap that we'd be better off without. But he says it all Judge-like and nice.

Despite the decision in this case, none of these folks are quite done with Refco yet. John Coffee has more parties to chase on behalf of the aggrieved - someone signed off on those Refco books Grant Thornton . For Mayer Brown there is still the small matter of the Refco-related RICO suit brought by Thomas H. Lee Partners and a multi billion dollar lawsuit filed by Refco's bancruptcy trustee.

Oh and Joseph Collins also has the small matter of his own federal criminal trial on security fraud charges. That'll start in April.

Call it a full docket all around. More on this mess via Law.com

-- MDT

Labels: Joseph Collins, Mayer Brown Rowe and Maw, Refco, Stoneridge

And does a better job at it than I would. But does the verdict truly mean that Enron is "dead" as so many have claimed?

Why yes... Well, maybe... Not exactly..? Ok ok...just read this.

UPDATE: Denied! With no comment from the high court.

-- MDT

Labels: Coughlin Stoia, Enron, FinancialWeek, Stoneridge, WSJ

Lest you think that the Stoneridge verdict was a total game changer...here's a monster verdict in a rare securities case that actually made it to a jury. Apollo Group is the corporate entity behind the ubiquitous internet advertizer, University of Phoenix. The "university" is one of the biggest and most notorious "distance learning" diploma mills around (325,00 students nationwide - PE has locations in 40 states).

At issue in the suit was Apollo's failure to disclose a 2004 probe by the Department of Education that accused University of Phoenix of illegally paying staff members based on the number of students they enrolled. For its part Apollo argued that disclosing the DOE report prematurely would have done unwarranted harm to shareholders. A jury found differently, determining that Apollo should bear responsibility for 60% of shareholder losses.

-- MDT

Labels: Apollo Group, class action, Phoenix University, securities, Stoneridge

"Scheme Liability" takes a hit with the highe court verdict in Stoneridge Investment Partners v. Scientific-Atlanta - one of the most anticipated cases of '07. Details at Legal Times.

Labels: scheme liability, securities, Stoneridge

Using the "funeral" of Conrad Black as the venue. Required reading...

-- MDT

Labels: corporate investigation, Mark Dann, prosecution, prosecution guidelines, Stoneridge, sub-prime mortgage

A bit of the overwrought from the Chicago Tribune... Good coverage on the case can be found at the blog of the National Association of Manufacturers (where I saw the Tribune article).

I'd probably find myself disagreeing with the NAM point of view, but that doesn't mean I don't like their style.

- MDT

Labels: scheme liability, securities, Stoneridge, third party liability

Forbes seems to think so...

-- MDT

Labels: class action, securities, Stoneridge

A potential pyrrhic victory for Bill Lerach, whose Enron investor suit weighs heavily on the outcome, Stoneridge Investment Partners, LLC v. Scientific-Atlanta will be one of the most watched cases of the year. The case will determine the currency of scheme liability - whether third parties that knowingly participate in fraud can be held liable for their actions. Will the Supremes back the President's play or follow the lead of SEC Chairman Christopher Cox? We'll see. WSJ handicaps the case right here.

-- MDT

Labels: Bill Lerach, Enron, scheme liability, Stoneridge

A ruling from the high court on 3rd party liability is coming... The FT updates.

-- MDT

Labels: Stoneridge

Stoneridge v Scientific-Atlanta - what The Economist is calling the most important securities litigation clash in a generation. The SEC's has come out in favor of investors, the President not so much. What will ultimately happen when the Supreme Court gets involved, although their predilection (in the court's current incarnation) for siding with business is not exactly a secret, is anyone's guess. But they ARE guessing. And guessing. And guessing.

-- MDT

Labels: Bill Lerach, class action, securities, Stoneridge

The Bush administration has opted not to second the SEC's supportive position regarding a pending class action lawsuit that has former shareholders of defunct energy trader, Enron, pursing several investment banks for damages arising from their role in obscuring Enron's house of cards.

The SEC had asked for a brief of support to be filed by the Justice Department's Solicitor General Paul Clement. As of Monday's deadline, no such amicus brief had been filed by the DOJ and no support, at this point is expected. Not entirely surprising given the cozy relationship between Enron and the current administration.

In fact President Bush (who The Daily Caveat usually avoids discussing) chimed in with his own comments on the case, which gave a hint which way the winds were blowing at DOJ. The President decried the notion of unnecessary lawsuits, which we can assume to include those brought by Bill Lerach.

The SEC had voted at a 2 to 3 margin to support the suit, with Bush appointee, SEC Commissioner Christopher Cox siding with two democrats in support of the case. The U.S. treasury has taken the opposite stance, arguing that the case could set a precedent that would harm U.S. Competitiveness.

For more on the conflict between the Justice Department and the SEC, check out this article from the China Standard.

-- MDT

Labels: accounting fraud, Bush administration, class action, Enron, investment banks, Paul Clement, Stoneridge