[JURIST] The US Supreme Court [official website; JURIST news archive] heard oral arguments [transcript, PDF] Tuesday in Stoneridge Investment v. Scientific-Atlanta [Duke Law case backgrounder; merit briefs], 06-43, to determine when a "secondary" actor in securities fraud, such as a bank, lawyer, or accountant, can be treated as a "primary" actor in terms of shared liability for the actions. The case was filed by cable giant Charter Communications [corporate website] investors against two Charter suppliers alleged to have aided Charter executives in misrepresenting the company's revenues. The US Court of Appeals for the Eighth Circuit had dismissed [opinion, PDF] claims for liability because the defendants had been found to be aiders and abettors to securities fraud, not primary violators. Chief Justice John Roberts and Justice Antonin Scalia questioned whether allowing a suit against secondary actors unfairly expands shareholders' rights. AP has more.
The Court also heard oral arguments [transcript, PDF] in Watson v. United States [Duke Law case backgrounder; merit briefs ], 06-571, in which it considered whether a mandatory five-year sentence must be imposed in conjunction with a drug crime because a gun has be "used." The Court examined whether an unloaded handgun traded as payment for drugs can be said to have been "used" under 18 USC Section 924(c)(1)(A) [text], an issue on which the circuits have split. The US Court of Appeals for the Fifth Circuit ruled [PDF text] that Watson had "used" the handgun sufficient to support his conviction and sentence.