Supreme Court justices today will effectively be asked to rule on the jurisprudence of their newest colleague in a fraud case that tests how far the Securities and Exchange Commission can go in holding stockbrokers accountable for disseminating false statements to clients, the Wall Street Journal reported. The court’s newest member, Justice Brett Kavanaugh, considered the case last year as an appeals court judge and wrote a spirited dissent in support of a broker whom the SEC sanctioned after finding he willfully sent misleading emails that solicited investments in a startup energy company. The commission said that broker Francis Lorenzo was aware the company’s technology, which claimed to generate electricity by converting solid waste to gas, didn’t work and was worth little, if anything, yet sent the solicitations to potential investors anyway. The SEC hit the broker with a $15,000 civil penalty and barred him for life from the securities industry. Lorenzo contested the charges, saying that his boss wrote the text of the emails and that he didn’t think about their contents before he sent them. The broker said that the emails stated explicitly that he was sending them at his boss’s request. Read more. (Subscription required.)
Don't miss bankruptcy scholars Profs. Ronald J. Mann of Columbia Law School, Margaret Howard of Washington and Lee University School of Law and Ralph Brubaker of University of Illinois College of Law to take part in a discussion at a Winter Leadership Conference session on Friday titled "Historical Perspectives: Bankruptcy and the U.S. Supreme Court." The presentation will not only focus on the most important bankruptcy decisions by the Supreme Court but also on the decision-making process that the Justices undertake to reach their conclusions. Register here.