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April 21, 2005
Chamber of Commerce, Washington Legal Foundation Trying to Protect Criminals The Wall Street Journal reports on the U.S. Chamber of Commerce, and their attempts to stop businessmen from having to be accountable for their crimes: The Chamber recently filed an amicus brief in the so-called Nigerian barge case, in which four former Merrill Lynch & Co. officials and a former Enron vice president were convicted last fall. The arguments put forth by the Chamber, which describes itself as the nation's largest business federation, with more than three million members, could affect the sentences in the barge case as well as other corporate-fraud trials. The Chamber's brief is an example, observers say, of a feeling within the business community that the government's crackdown on corporate behavior may have gone too far in the wake of the scandals at Enron and other big companies. With the passage of time, "perhaps the business community feels the climate is a bit better for them to push back" against some of those initiatives, says Robert Litt, a former senior Justice Department official and now a partner at the Washington law firm Arnold & Porter. The Chamber has been particularly active, challenging moves by the Securities and Exchange Commission and Justice Department. For instance, it is supporting Arthur Andersen LLP's pending Supreme Court appeal of the accounting firm's 2002 obstruction-of-justice conviction for destroying documents related to longtime client Enron. The Chamber's amicus brief in the Andersen case, filed jointly with the Washington Legal Foundation, says that unless the rules for corporate conduct are better defined, the "increasingly aggressive prosecutions of white-collar crime will inflict incalculable economic and intangible harm on businesses, their employees and their shareholders." [...] The Chamber of Commerce's brief supporting the defendants' position argues that the "artificial inflation" of a stock price shouldn't be used to determine loss. A "loss" comes only when disclosure of the alleged fraud causes a drop in the price of the company's stock, the brief says -- adding that the government embraced this definition in a civil securities case that was decided this week by the Supreme Court. In that opinion, the High Court agreed that investors need to show a link between the alleged fraud and a decline in the company's stock price to proceed with civil suits.
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