Investor Advocates Applaud SEC's Position in High Profile Fraud Case: 'Primary Violators' Need Not Be Publicly Named to Be Liable to Securities Investor

Investor Advocates Applaud SEC's Position in High Profile Fraud Case: 'Primary Violators' Need Not Be Publicly Named to Be Liable to Securities Investor - 8/7/2009 , Class Action News, Class Action, Securities News, shareholder class action, claim, litigation, securities action, common stock'>

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Investor Advocates Applaud SEC's Position in High Profile Fraud Case: 'Primary Violators' Need Not Be Publicly Named to Be Liable to Securities Investor
Staff Writer

PR Newswire. August 7, 2009
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EXCERPT: The National Association of Shareholder and Consumer Attorneys (NASCAT) praised the Securities and Exchange Commission (SEC) for its amicus brief filed yesterday in PIMCO Funds, et al v. Mayer Brown LLP, et al now being heard by the United States Court of Appeals for the Second Circuit. In its brief, the SEC said that actual "'attribution of a false or misleading statement by a person is only one means"' by which a person may be a "'primary violator"' of SEC Rule 10b-5's prohibition against making false or misleading statements to investors. A person may also be a primary violator and, thus, held accountable to investors, if that person provides the false or misleading information that another person puts into a false statement, the SEC said. "'In its brief, the SEC takes an important step toward restoring some investor protections lost in recent years in court decisions that have overly restricted and rolled-back investors' rights of action and curbed their ability to recover losses from those who, by all traditional definitions of the word, unquestionably engaged in fraud,"' said Ira Schochet, Esq., NASCAT's President. "'In addition, the SEC also reiterated the long-standing position of the Commission and the Supreme Court that private investor lawsuits are necessary to provide maximum compensation for injured investors while also supplementing enforcement of securities laws and deterring wrongful practices."' The SEC brief and underlying appeal relate to a lawsuit brought by shareholders and bond holders against the lawyers who allegedly designed and helped sell to counterparties sham transactions and falsified securities offering documents to cover-up hundreds of millions of dollars in losses by Refco, Inc. Refco, the once global, publicly traded derivatives dealer, collapsed in 2005 when its cover-up of the devastating losses unraveled.

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