|Legal Blog Watch|
Can Justice Department Official Monica Goodling Take the Fifth?
Monica Goodling, a Justice Department official, invoked the Fifth Amendment when called to testify under oath before a Senate panel investigating the December 2006 purge of eight U.S. Attorneys. But bloggers aren't remaining silent about Goodling's decision.
As this account from the New York Times (3/26/07) reports:
Orin Kerr says this:
By the way, if you're looking for a way to track the emerging developments regarding the U.S. Attorney firings, check out the new blog, Gonzales Watch.
Supreme Court Considers Liability for Secondary Actors in Securities Fraud
Investment banks and law firms that handle corporate transactions will be watching the Supreme Court closely next term as it addresses the question of whether "secondary actors" like law firms, which facilitate fraudulent transactions, can be sued for securities fraud. Yesterday, the Supreme Court announced that it accepted review of Stoneridge Investment v. Scientific Atlanta, an 8th Circuit decision where the court held that civil liability for damages does not lie against defendants who merely "aid and abet" securities fraud unless those defendants actually made a mistatement. The 8th Circuit decision conflicts with the 9th Circuit's decision in Simpson v. AOL Time Warner, Inc., et al., 452 F.3d 1040 (9th Cir. 2006), which held that secondary actor can be held liable if some if its conduct had "the principal purpose and effect of creating a false appearance of fact" in support of a scheme to defraud." (For a good overview of these issues, see this article, Expanded Liability Under Section 10[b]).
What's interesting, however, is that what may have finally nudged the Supreme Court to accept review of Stoneridge isn't the split between the 8th and 9th Circuits alone but, rather, a recently issued 5th Circuit decision in an Enron-related case. As Lyle Denniston discussed in this analysis at SCOTUSBlog, the 5th Circuit threw out a class action against various banks and brokerage firms for transactions related to Enron's defrauding of investors, finding that "the banks and brokerage firms had not engaged in a "deceptive act" under securities fraud law. From Denniston's post:
Denniston's post, which was written before the Supreme Court's cert grant in Stoneridge, suggested that the 5th Circuit's decision, which aligned with the 8th Circuit, may have minimized the conflict, particularly because the 9th Circuit decision had become moot. But Denniston also noted that the Enron case was headed for the Supreme Court, and because of that, the Court might decide to accept review of a case that addresses similar issues already pending review. And apparently, Denniston was right.
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