In a ruling without comment made Jan. 22, the justices rejected a case by Enron investors -- led by the University of California -- who said the big banks that colluded with Enron on the shady deals that led to its collapse should be open to lawsuits, too.
But the 5th U.S. Circuit Court of Appeals in New Orleans turned that down. This week, the High Court did, too. Unions and worker pension funds were among the investors who joined the university in arguing that the banks and other colluders in such cases should be legally liable for the losses, too.
Instead, the justices said only the company involved -- Enron in this case -- can be taken to trial by anyone who charges their money was fraudulently lost. To emphasize the point, the justices on the same day tossed out a similar case brought by the California State Teachers Retirement System against Avis Budget Group.
The court\'s ruling disappointed AFL-CIO President John Sweeney. The federation\'s Office of Investment has actively supported shareholders -- including union pension funds -- challenging not just the mismanaged companies but also the bankers.
"For the last five years, lower courts have been considering whether the powerful, politically connected financial institutions at the center of the Enron fraud will have to answer to investors for what they did. Now we have the final answer from the Supreme Court: They will not.
"The Enron financial fraud cost America\'s working families tens of billions of dollars in lost retirement assets. For thousands of Enron employees, whose 401-k plans were locked into Enron stock, the losses were personally catastrophic," he added. That included unionized employees at the utility company in Portland, Ore.
"At the center of the fraud were deals Enron did with major financial institutions, whose clear purpose was to hide the true state of Enron\'s finances," Sweeney added. "The public will not even have the benefit of the court explaining why because the court simply refused to hear the case. It is hard to reconcile the result in the Enron case with either the principles of substantive justice or the rule of law."
This article was written by Press Associates, Inc., news service. Used by permission.
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In a ruling without comment made Jan. 22, the justices rejected a case by Enron investors — led by the University of California — who said the big banks that colluded with Enron on the shady deals that led to its collapse should be open to lawsuits, too.
But the 5th U.S. Circuit Court of Appeals in New Orleans turned that down. This week, the High Court did, too. Unions and worker pension funds were among the investors who joined the university in arguing that the banks and other colluders in such cases should be legally liable for the losses, too.
Instead, the justices said only the company involved — Enron in this case — can be taken to trial by anyone who charges their money was fraudulently lost. To emphasize the point, the justices on the same day tossed out a similar case brought by the California State Teachers Retirement System against Avis Budget Group.
The court\’s ruling disappointed AFL-CIO President John Sweeney. The federation\’s Office of Investment has actively supported shareholders — including union pension funds — challenging not just the mismanaged companies but also the bankers.
"For the last five years, lower courts have been considering whether the powerful, politically connected financial institutions at the center of the Enron fraud will have to answer to investors for what they did. Now we have the final answer from the Supreme Court: They will not.
"The Enron financial fraud cost America\’s working families tens of billions of dollars in lost retirement assets. For thousands of Enron employees, whose 401-k plans were locked into Enron stock, the losses were personally catastrophic," he added. That included unionized employees at the utility company in Portland, Ore.
"At the center of the fraud were deals Enron did with major financial institutions, whose clear purpose was to hide the true state of Enron\’s finances," Sweeney added. "The public will not even have the benefit of the court explaining why because the court simply refused to hear the case. It is hard to reconcile the result in the Enron case with either the principles of substantive justice or the rule of law."
This article was written by Press Associates, Inc., news service. Used by permission.
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