There was a landmark Supreme Court ruling earlier in the week that will profoundly impact Americans. In a 5-3 ruling, the Supreme Court upheld a lower court ruling that Businesses who knowingly aid and abet another Business in the commission of a crime (stock manipulation in this case), are immune from Criminal or Civil lawsuits.
The importance of this ruling cannot be underestimated.
The United States has officially become a Plutocracy.
On Tuesday the Court ruled that it's OK to profit from Securities fraud, as long as you are not a "Principle Architect" of that fraud. From the NYT:
In one of the most closely watched business cases in years, the Supreme Court on Tuesday upheld protections for secondary players in securities-fraud schemes, as opposed to the primary engineers of those plots. The court ruled, 5 to 3, against plaintiffs who had sued two cable television equipment suppliers whose dealings with a cable television company had allowed the cable outfit to inflate its earnings and hide its failure to achieve its financial goals...
The Stoneridge ruling appears to offer protection for accountants, lawyers and others who may know about corporate shenanigans but can establish that they are not directly involved in them. Defense lawyers in shareholders’ suits often complain that defendants can be forced to settle claims with little merit rather than risk prolonged and costly litigation...
When the case was argued before the justices on Oct. 9, the lawyer for Scientific-Atlanta and Motorola asserted that, at worst, his clients had aided and abetted Charter’s fraud, and thus should not be liable.
OK. So let me get this straight. Only the primary firm (who owns the Securities) should be liable for a Stock Fraud. If I only "aid and abet" a Securities fraud, I haven't committed a crime.
Of course, if you "aid and abet" a Murder or Robbery, you're as liable as if you were the trigger man. Seems SCOTUS has a different view when it comes to White-Collar crime.
Bloomberg stated the case more succinctly:
The U.S. Supreme Court put new limits on shareholders suits against a company's banks and business partners in a ruling that may thwart efforts to recoup billions of dollars lost in frauds at Enron Corp. and HealthSouth Corp.
The justices, voting 5-3, threw out a lawsuit by Charter Communications Inc. investors against two of its suppliers, Motorola Inc. and Scientific-Atlanta Inc. The court said the shareholders didn't show they relied on the alleged deception by the suppliers in making investment decisions.
The ruling is a triumph for business groups in what they called their highest priority in the court's 2007-08 term. Trade groups representing banks, accounting firms and law firms took an especially keen interest, saying their members might present tempting targets for shareholder lawyers.
``It is a complete and thorough victory for the defendants,'' said Donald Langevoort, a securities-law professor at Georgetown University in Washington. He previously called the case ``securities law's Roe v. Wade.''
The ruling will bolster efforts by Merrill Lynch & Co. and other banks to block a lawsuit by Enron investors and by UBS AG to defeat claims by HealthSouth shareholders.
The case split the court along ideological lines. Justice Anthony Kennedy wrote the court's majority opinion, which Chief Justice John Roberts and Justices Samuel Alito, Antonin Scalia and Clarence Thomas joined.
Kennedy wrote that allowing additional shareholder lawsuits ``may raise the cost of being a publicly traded company under our law and shift securities offerings away from domestic capital markets.''
Justices John Paul Stevens, Ruth Bader Ginsburg and David Souter dissented. Stevens wrote that Congress enacted the federal securities laws ``with the understanding that the federal courts respected the principle that every wrong would have a remedy.''
Again, the importance of this decision cannot be underestimated. Wall Street is counting on this ruling to provide air cover for the upcoming scandals with Subprime Loans & Debt securitization. I wonder also if this also sabotages future RICO investigations for Corporate criminal conspiracies?
The lack of coverage by the MSM only confirms the point.