The Supreme Court is currently deciding whether accounting firms, investment bankers, lawyers, and others can be sued for corporate failures related to accounting cheat. The outcome of the case will have huge ramifications for former shareholders in companies like Enron, who are pursuing class-action lawsuits to recoup losses from companies affiliated with the former trading giant that imploded in a wave of accounting scandals.

According to The Financial Times, “The trade community wants the court to protect US and foreign companies - along with accountants, lawyers and investment banks - from a new wave of costly investor lawsuits. What they would regard as the wrong ruling in the case could frighten foreign issuers absent from US markets and dissuade abroad groups from doing commerce with US corporations, commerce groups say. Investor advocates say that whether they lose

the case, victims of corporate swindle - including those who suffered in the Enron debacle - would find it tough to gain compensation.”

It’s generally impossible for shareholders to gather money from the companies they lost money investing with — whether the companies were solvent, they wouldn’t need to gather money.

The issue to me is that lawyers, accountants, and investment banks are paid huge fees to perform due diligence and, whether they fail to detect a swindle, they have losed out to do their jobs! whether these citizens can gather such huge fees for doing the work they do, shouldn’t it stand to reason that they ought to give some back when they mess up badly?

Original post by Zac Bissonnette

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