"Scheme Liability" Awaits High Court Scrutiny

Law360, New York (September 17, 2007, 12:00 AM EDT) -- The first time James D. Cox, the Brainerd Currie Professor of Law at Duke University, saw an articulation of the theory of “scheme liability,” it was in a friend-of-the-court brief in the securities action against underwriters of now-defunct energy giant Enron Corp.

“It said, 'These investment bankers can be deemed to be making statements if they're part of a scheme that gives rise to a false representation,'” Cox explained.

“I think if you're enabling the lie, you should be responsible,” he added, and he has signed...
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