ON-Lion Letter
In a "friend-of-the-court" brief written with the assistance of nationally prominent legal scholar Kenneth Starr, the Washington Legal Foundation (WLF) in Washington, D.C., has urged the U.S. Supreme Court to protect investors by imposing restraints on the ability of plaintiffs' attorneys to bring unwarranted securities-fraud lawsuits.  Many securities-fraud suits, although nominally filed for the purpose of protecting investors, actually harm investors by transferring wealth from stockholders to the pockets of lawyers.

The mid-August brief, filed in Stoneridge Investment Partners, LLC v. Scientific-Atlanta, Inc., argues that a company should not be subject to a securities-fraud suit based solely on having entered into an arm's-length, non-financial transaction with another company alleged to have engaged in fraud. 

"The public should not be fooled by the plaintiffs' bar into thinking that allowing suits of this sort to go forward will somehow help investors," according to WLF chief counsel Richard Samp.  "The open-ended liability standards the plaintiffs are pressing for are likely to prompt more frauds inside the judicial system than the frauds outside the system they claim to be combatting."

Starr, dean of the Pepperdine University School of Law, is a former federal judge, U.S. Solicitor General, and Independent Counsel.

The Lynde and Harry Bradley Foundation in Milwaukee supports WLF's Investor Protection Program.
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