Abstract
In Stoneridge Investment Partners, LLC v. Scientific-Atlanta, Inc." the U.S. Supreme Court ruled that there is no private cause of action against aiders and abettors to a securities fraud. Instead, the Court ruled that only the Securities and Exchange Commission (SEC) could pursue civil damages against aiders and abettors. This Note reviews the history that led to Stoneridge, and argues that Stoneridge leaves defrauded investors with little or no renledy against the aiders and abettors who wronged them. Additionally, Stoneridge presses unfavorable side effects on the SEC, most notably forcing the SEC to take on an overly broad role as a collector of civil damages at the expense of the SEC's primary mission to deter securities fraud. The Note concludes by making several recommendations for changes in federal securities law that will 1) provide adequate compensation to defrauded investors, 2) preserve the SEC's mission as a deterrent agency, and 3) enable Congress to continue its pursuit of curbing vexatious securities litigation against secondary actors, a primary reason Stoneridge was decided as it was.
Recommended Citation
Reiser, Adam
(2009)
"Compensating Defrauded Investors While Preserving the SEC's Mission of Deterrence: A Call for Congress to Counteract the Troubling Consequences of Stoneridge,"
Utah Law Review: Vol. 2009:
No.
1, Article 12.
Available at:
https://dc.law.utah.edu/ulr/vol2009/iss1/12