The Wall Street Journal carried a story yesterday on the pressure building on the SEC to file an amicus brief supporting the petition for certiorari filed by the plaintiffs in the Enron securities litigation against the firm’s former financial advisors.  In Regents of the University of California v. Credit Suisse, the Fifth Circuit reversed the certification of a class bringing securities claims against investment banking firms that worked with Enron, holding that Section 10(b) does not provide for primary liability for such advisors and deepening the split among the federal appellate courts on that issue.

The Supreme Court has already agreed to decide whether financial advisors may be liable under Section 10(b) in Stoneridge Investment Partners v. Scientific Atlanta, an appeal from the Eighth Circuit, and The Race to the Bottom Blog will explore the issues raised by these cases next week.  But there is a crucial–and largely overlooked–difference between Stoneridge and the Enron litigation that may well affect the outcome.  It concerns the makeup of the justices who will be deciding the case.  If the Court grants review in the Enron litigation as well, it may well tell us something about the likely outcome in Stoneridge itself.

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