Letter to the Editor pt 2. critique in essay form

Letter to the Editor pt 2. critique in essay form - Chen 1...

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Chen 1 Kristin Chen Professor Peine World Inc. 12/6/2007 **FINAL PORTFOLIO REVISION** Letter to the Editor Part II: Critique in Essay Form [ Stoneridge v. Scientific Atlanta ] The burst of the dot.com stock bubble, the 2000 and 2001 NASDAQ market crash, and the ruthless bear market of the past three years, have resulted in losses of billions of dollars for investors who trusted their brokers and brokerage firms to protect their accounts. Outraged investors nationwide who lost substantial amounts of their life savings feel that their trust was betrayed, and are now demanding to know who is responsible. Furthermore, our news headlines are still rife with business scandals that range from accounting fraud to insider trading involving companies such as Enron, Tyco, and World.com—even further decreasing investors’ dwindling trust. Now, as the United States government resolves to create a solution to restore ethics to the business world, it must also contend with ameliorating the collateral damage caused by these unethical corporate infractions. One example of a case that seems to be “collateral damage” is Stoneridge Investment Partners LLC v. Scientific—Atlanta Inc., a very high profile Supreme Court case whose decision has the power to redefine the fundamental principles of securities- litigation and incur broader consequences for society and the economy. Stoneridge Investment Partners LLC v. Scientific –Atlanta Inc . raises the question of whether or not shareholders should be given the ability to sue lawyers and other third parties in corporate fraud suits. The lawsuit was prompted when Charter Communications Inc. engaged in accounting fraud to meet analyst expectations by using transactions with two suppliers, Scientific-Atlanta and Motorola Inc., to inflate their own revenue (Scanell, 2007). Because of its illegal actions, the company agreed to pay $144 million to settle a class-action lawsuit led by
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Chen 2 Stoneridge Investment Partners, one of its shareholders. However, Stoneridge also sued Motorola Inc. and Scientific-Atlanta for conspiracy.
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