Press Releases

Release Date: January 15, 2008
Contact:
Ben Veghte, (202) 962-7358, bveghte@sifma.org

Supreme Court Decision in Stoneridge Case Welcomed by SIFMA

Washington, D.C., January 15, 2008 – The Securities Industry and Financial Markets Association (SIFMA) today applauded the Supreme Court’s decision in the case of Stoneridge Investment Partners v. Scientific-Atlanta and Motorola.  In its decision the Court correctly concluded that shareholders cannot sue investment banks, attorneys, accountants, and other third-parties who did business with a company that engaged in fraud, where the investors did not rely upon any deceptive acts of the third parties.  Had the Court ruled any other way, the outcome would have unnecessarily generated significant additional litigation, costing billions of dollars to American business, and putting U.S. companies at a competitive disadvantage to their foreign counterparts.

“The Supreme Court clearly made the right decision in this important case.  This decision ensures that over zealous litigation does not derail the U.S. economy,” said Ira Hammerman, senior managing director and general counsel at SIFMA.  “The wrong ruling would have unleashed a tsunami of damaging side effects, infecting the entire U.S. economy and harming investors.  In reaching its decision, the court clearly recognized that investors already receive substantial protections under the law, and the SEC and other securities regulators are already equipped with all the necessary regulatory tools to recoup lost money for investors.”

In August 2007, SIFMA filed an amicus brief in the case that made many of the same arguments that the Supreme Court reiterated in its opinion, including the unacceptable burden that American businesses would suffer if the Court had reached a contrary result.

SIFMA’s brief is available at:

http://www.sifma.org/regulatory/briefs/Stoneridge8-15-07.pdf

- 30 -

The Securities Industry and Financial Markets Association brings together the shared interests of more than 650 securities firms, banks and asset managers. SIFMA's mission is to promote policies and practices that work to expand and perfect markets, foster the development of new products and services and create efficiencies for member firms, while preserving and enhancing the public's trust and confidence in the markets and the industry. SIFMA works to represent its members’ interests locally and globally. It has offices in New York, Washington D.C., and London and its associated firm, the Asia Securities Industry and Financial Markets Association, is based in Hong Kong.