I’ve been meaning to pass along this Peter Wallison/American.com article that does an excellent job of summarizing what is at stake with regard to the U.S. Supreme Court’s review of the Stoneridge Investment Partners v. Scientific-Atlanta case involving the issue of secondary liability for companies that do business with a company that commits securities fraud:

It is an old legal saw that hard cases make bad law, but Stoneridge should not be a hard case. The legal principle advanced by the plaintiffsóthat persons unrelated to the statements that constituted securities fraud could be held liable for the plaintiffsí lossesówould be impossible to restrict or cabin in any effective way. Every party that engaged in ordinary commercial transactions with a public company in the United States could later be accused of participating in a securities fraud if the commercial transaction itself could be characterized as fraudulent or deceptiveóeven if the commercial transaction was not understood by the defendant to be part of a securities fraud.

Like this.