Imagine you had the greatest Wall Street Scam, since CDO's and Credit Default Swaps -- and all you needed were some slick flyers, to get customers in the door.
Now imagine, you "outsource" -- er, I mean just assign the Promotional Flyer project to one of your "corporate subsidiaries". Give them an incentive to aggrandize the (non-) benefits of your new sure-fire Scam.
What could go wrong with that scheme?
Not much apparently, long as the pro-corporate forces on the highest court on the land, continue to dodge principles like Corporate Accountability and Consumer Protection.
The Supremes, have just chalked another one up for those pesky Wall Street Barons ...
So, what was this "bait and switch" ruling all about? One decision that makes 3-Card Monty a viable technique for tying up your retirement funds -- long as they can find a 3rd party stooge to go stand out on the corner ...
Supreme Court Ruling on Janus Funds “Smells”
Larry Doyle, Sense on Cents, BusinessInsider.com -- Jun. 16, 2011,
Janus Capital Group Inc (JNS.N) and a subsidiary cannot be held liable in a lawsuit by shareholders over allegedly false statements in prospectuses for several Janus mutual funds, the U.S. Supreme Court ruled on Monday.
By a 5-4 vote in a narrow decision, the justices overturned a ruling by a U.S. appeals court that a class-action securities fraud lawsuit could go forward.
[...]
The high court agreed. It ruled the alleged false statements in the prospectuses were made by an investment fund, not Janus Capital, and that Janus and the subsidiary therefore cannot be held liable in a private securities fraud lawsuit.
[...]
It alleged that the prospectuses of several Janus funds created the false or misleading impression that the company would adopt measures to curb market timing -- when in fact secret arrangements with several hedge funds permitted such transactions, to the detriment of long-term investors.
And what did Clarence Thomas do -- besides rationalize the majority opinion, in favor of letting Wall Street (continue to) rip us off -- long as they "outsource it" first ... to keep their own greedy hands clean ...
So No One’s Responsible?
Editorial, NYTimes.com -- June 14, 2011
With Justice Clarence Thomas writing for a 5-to-4 majority, the Supreme Court has made it much harder for private lawsuits to succeed against mutual fund malefactors, even when they have admitted to lying and cheating.
The court ruled that the only entity that can be held liable in a private lawsuit for “any untrue statement of a material fact” is the one whose name the statement is presented under. That’s so even if the entity presenting the statement is a business trust — basically a dummy corporation — with no assets, while its owner has the cash.
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Justice Thomas’s opinion is short and, from the mutual fund industry’s perspective, very sweet: Janus Capital Group and Janus Capital Management were heavily involved in preparing the prospectuses, but they didn’t “make” the statements so they can’t be held liable. Only the business trust set up to hold the funds can be held liable, though it has no assets of its own to compensate plaintiffs in the lawsuit. Which means that there is no one to sue for the misleading prospectuses.
There is no doubt that Janus Capital Group is responsible. It used legal ventriloquism to speak through the business trust and Janus funds.
What's a little guy or gal to do? When the Big Guys can hide behind Dummy Corps?
When it comes to Wall Street -- Not much apparently, or else be ready to be taken on a long roller coaster ride.
When it comes to Wall Street -- Their Word is their Bond -- Their Word is Somebody Else's Problem -- while the Profits remain entirely Their Own!
So Buyer Beware -- and DON'T Trust those Prospectuses -- because as Judge Thomas has ruled -- Whatever THEY are promising, NO ONE is really Responsible for assuring "those promises" are accurate. It's only advertising for dollars, afterall.
$$$$$$$$$$$$$$$$$$ Prospectus $$$$$$$$$$$$$$$$$