As President Bush and Treasury Secretary Hank Paulson loosen SEC regulations to make Wall Street more attractive for foreign investment, the dreaded Enron debacle raises its ugly head. A U.S. Court of Appeals denied investors the opportunity to sue Enron's investment banks as a class. This must be huge relief for the big investment houses, ensuring their record profitability string has a chance of continuing. Which houses benefit from this ruling?
Barclays, Deutsche Bank, Citigroup, Merrill Lynch, CSFB, Lehman Brothers, Bank of America, JP Morgan and Canadian Imperial Bank.
Individual investors, like the University of California can continue their lawsuits. The Appeals court decided class action status could coerce a settlement even if unwarranted. However numerous state attorney generals support shareholders' rights to sue as a class.
The list included attorneys general from Texas, Alabama, Arizona, Arkansas, California, Connecticut, Georgia, Hawaii, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maryland, Michigan, Minnesota, Mississippi, Montana, New Hampshire, New Jersey, New Mexico, North Dakota, Oklahoma, Oregon, Pennsylvania, South Carolina, South Dakota, Utah, Vermont and West Virginia.
Might this issue end up at the Supreme Court? Doubtful as Republicans want this to go away ASAP. Recall that four Merrill Lynch executives convicted in their role of fraudulently buying three floating power plants so Enron could meet their earnings target? Their convictions have been set aside.
The Bush administration has deep tolerance for corporate malfeasance in contrast to our President's zero tolerance for people taking food, water, and shoes in the aftermath of a devastating hurricane.
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