Setback For Enron Investor Lawsuits
NY Times: (reg req'd.) In a lawsuit that harks back to the Enron scandal, the Bush administration is at odds with the federal agency that oversees s
In a lawsuit that harks back to the Enron scandal, the Bush administration is at odds with the federal agency that oversees securities markets as well as with state attorneys general and consumer and investor advocates.President Bush personally weighed in with his views before the administration decided not to support investors whose securities fraud case is now before the Supreme Court.
The president's message was that it's important to reduce ''unnecessary lawsuits'' and that federal securities regulators are in the best position to sue, said Al Hubbard, Bush's chief economic adviser and director of the National Economic Council.[..]
Bush's role in the case underscores its significance. The outcome of the Supreme Court case could determine whether investors can pursue lawsuits to recover investment losses if they can prove collusion between Wall Street institutions and scandal-ridden companies.[..]
''The president believes that it's important to make certain that we reduce the unnecessary lawsuits because that's a very big burden to the economy, which adversely impacts investors,'' Hubbard added.
''There was a difference of opinion within the administration, but ultimately the president makes up his own mind,'' said Hubbard. He said the Federal Reserve and the Office of the Comptroller of the Currency sent letters supporting ''the policy position that the president believes in.''
The Securities and Exchange Commission voted 3-2 to ask the solicitor general to support shareholders in the pending court case.