The U.S. Supreme Court will soon decide whether Enron shareholders can recover damages from the banks and brokerage houses that helped Enron cook its books. Despite a request from the Securities and Exchange Commission, however, the Department of Justice will not weigh in on behalf of the shareholders, reports Nashuatelegraph.com, courtesy of The Washington Post.
Solicitor General Paul Clement refused to file an amicus curiae brief in the case after Treasury Secretary Henry Pauslon recommended that the government's position should be to "butt out," the story says. Washington Post special writer Harry Meyerson explains it this way:
In other words, Treasury argued, since capital is mobile, shareholder protections in the United States cannot be any stricter than those in Albania and the Cayman Islands, lest we lose our business edge.
The White House also added its opinion to the mix, couching its position against the brief in terms of discouraging unnecessary lawsuits, Meyerson says. Considering that both Paulson and the White House lodged their opinions in favor of relaxing the Sarbox burden on businesses, the news shouldn't come as a surprise.