SEC Must Choose Sides In This Enron Scandal

Robert Borosage, co-director of the Campaign for America’s Future, gave these remarks at a press conference this week with victims of the Enron collapse and their supporters, along with attorney William S. Lerach. The victims are asking the Supreme Court to overturn a lower-court ruling that bars the victims from suing bankers who advised Enron on the schemes that caused some stockholders their life savings, and they are calling on the Securities and Exchange Commission to file a brief supporting their position.

As director of the Campaign for America’s Future, I’m proud to join a broad coalition of consumer organizations, investor advocates, and leading labor unions standing up for the workers and small investors who had their savings stolen and their dreams shattered in the Enron fraud, the greatest corporate swindle in U.S. history

None of us will easily forget the collapse of Enron in a sea of lies. Literally tens of billions of dollars were lost. The hopes and plans of thousands were crushed. For the last six years, the question has been who will be held accountable.

Some executives have since gone to jail. Enron’s outside accounting firm that did the books went bankrupt and is no more. And led by the Regents of the University of California, the victims, employees, shareholders, pensioners and pension funds have pursued a reckoning from those who knowingly participated in the fraud. They brought suit against Enron and its executives, against the accountants, and against some of the world’s largest banks that plotted, participated in and profited from the scams. They were set to go to court when two conservative Fifth Circuit federal judges ruled that even if the banks were part of the fraudulent schemes that misled investors, the court would not hold them liable for their acts.

These issues are now before the Supreme Court. Critical to the court’s decision will be the position of the Securities and Exchange Commission. The SEC was established to police our securities markets and to protect small investors from precisely these kinds of frauds. The question today is which side is the SEC on—the perpetrators of the fraud or the investors who were its victims.

Small investors, union leaders, independent security watchdogs and university and worker pension fund representatives are calling on the SEC to stay true to its own mission, and to its own precedents, and insure that those responsible for the frauds that cost so many so much be held accountable to those who suffered in their schemes.

Views expressed on this page are those of the authors and not necessarily those of Campaign for America's Future or Institute for America's Future