The WSJ editors put the issue in Stoneridge Investment Partners, LLC v. Scientific-Atlanta, Inc., No. 06-43 (U.S.) as whether to allow "investors to sue a company simply because it did business with someone else who broke the law".  Note the "simply because it did business" with a lawbreaker — specifically, a perpetrator of securities fraud.

Blawgletter suggests that the editors may want to read the Solicitor General’s brief in the case.  Even the SolGen concedes, in supporting the Wall Street side, that engaging in sham transactions with knowledge of their fraudulent purpose constitutes "deceptive" conduct under securities law.

Maybe the WSJ views intentional deception as "simply [doing] business".  We respectfully disagree.

Barry Barnett

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