Activism
Supreme Court holds investor rights in balance
The US Supreme Court’s hearing of Makor v Tellabs – which will test the
standard investors must meet to get allegations of securities fraud to court –
could result in “nearly insurmountable” barriers to investors recouping fraud
losses should the decision favour the defendants, public pension advocate
NCPERS
and lawyers’ group NASCAT warned.
The case is being brought by shareholders in Tellabs, a supplier to the
telecommunications industry, and the defendants are accused of concealing from
investors the company’s slowdown in sales from mid-2000 to mid-2001.
NCPERS and NASCAT noted with particular concern the filing of a “friend of the
Court” brief favouring the defendants by the US Securities and Exchange
Commission and the US Department of Justice.
Kevin Roddy, counsel for NASCAT, said the defendants’ supporters are essentially
asking the Supreme Court to endorse a mini-trial before a federal judge at the
early pleading stage of a case. Under the US Constitution, said Roddy,
plaintiffs and defendants are entitled to a jury trial in both civil and
criminal cases.
Links
US Supreme Court
NCPERS
NASCAT
Tellabs
US Securities and Exchange
Commission
US Department of Justice
April, 2007 |
