Candidate Edwards Presses SEC Chief On Supreme Court Case
By Siobhan Hughes, Of DOW JONES NEWSWIRES
May 17, 2007
WASHINGTON (Dow Jones) -- Presidential candidate John Edwards joined a growing movement to persuade Securities and Exchange Commission Chairman Christopher Cox to take a stance in a Supreme Court case that is being closely watched by Enron Corp. investors who lost money in the accounting scandal.
"I urge the SEC to fulfill its historic mission of protecting investors," Edwards said in a statement issued by his campaign. "Silence or, even worse, siding with fraud participants would be a betrayal of that mission."
Edwards, who has been running a populist campaign that focuses on the gap between rich and poor, issued the statement at a time when some Enron investors have teamed up with trial lawyer Bill Lerach and union leader Andy Stern to make their voices heard. Last week, the group held a press conference to urge Cox and his fellow commissioners to file a brief in a case involving whether third parties can be sued under federal securities laws for allegedly participating in another company's accounting fraud.
Within hours of that press conference, the Enron investors won a meeting with the SEC chairman. They later praised Cox for agreeing to the meeting, and vowed to return to press the issue.
Enron filed for bankruptcy protection in December 2001 after what regulators called a massive accounting scandal that cost employees their jobs and retirement savings and wiped out billions of dollars in market value.
Enron shareholders last month asked the Supreme Court to review a U.S. appeals court decision in March that found that Enron shareholders can't proceed with a class-action securities-fraud lawsuit against banks and securities firms for their alleged role in the accounting fraud that led to Enron's collapse.
The Supreme Court hasn't said whether it will take up the case, but it will consider a separate case addressing whether third parties can be sued under federal securities laws for allegedly participating in another company's accounting fraud. The case involves a lawsuit against suppliers to Charter Communications Inc. (CHTR) involved in transactions where the cable company allegedly inflated its revenue.
"The question for workers is whether they will be able to recover losses from the big banks that enabled the Enron fraud," Edwards said. "The question for all Americans is whether their government will stand on the side of those big banks or regular families."
So-called friend-of-the-court briefs are due in that case on June 11. Cox told a Senate committee earlier on Wednesday that the solicitor general will file a brief on behalf of the U.S., and that the SEC's general counsel will recommend how the SEC should proceed in that case before the full commission votes on it.
"I expect that the net result of all that will be that the United States
government will do its level best to make sure that injured Enron investors
receive the full amount of coverage to which they're entitled by the legal
system," Cox said.