Former Enron Corp. shareholders on Tuesday called on the White House to support their efforts to hold third parties accountable when their actions help a company defraud investors.
In a last-ditch attempt to get the administration to back their effort to have the U.S. Supreme Court allow shareholders to sue third parties, the group of former Enron shareholders have written to President George W. Bush.
As victims of the Enron fraud, the worst in American history, we respectfully ask for your support at a critical moment in our pursuit of justice, says the letter signed by more than a dozen former shareholders.
The letter asks the administration not to file a brief on behalf of defendants accused of wrongdoing in an upcoming Supreme Court case involving Charter Communications and Scientific Atlanta.
The shareholders sued Scientific Atlanta and Motorola Inc., saying the companies aided a scheme to inflate Charter's revenues in 2000.
The outcome of the case could determine whether Enron plaintiffs will be able to go after banks such as Merrill Lynch and Co. Inc., Credit Suisse Group and Barclays Plc, which helped put together deals for the now-defunct energy trader.
The U.S. Securities and Exchange Commission recommended the Justice Department's solicitor general support plaintiffs in the Charter case.
However, Solicitor General Paul Clement, who represents the federal government before the Supreme Court, remained silent and did not take the SEC's position.
And the Treasury Department, the Federal Reserve and the Office of the Comptroller of the Currency have come out against third-party class-action lawsuits, which they said could hurt the U.S. economy.
Defendants in the Charter case have until August 15 to file briefs with the solicitor general.
Enron plaintiffs are asking Bush to not intervene on behalf of the defendants.
If they want to not antagonize those parties that support shareholders from Enron, they just have to sit back and not file a brief, said Jay Halfon, an attorney with the Center for Justice and Democracy, a group that fights for the ability of consumers to sue corporations.
You have the Treasury Department, Federal Reserve and comptroller on one hand, he said. But you have the majority of Americans invested in the market on the other -- and that's a lot on the other side.