The Bush administration moved to back business in a pending Supreme Court case Wednesday when U.S. Solicitor General Paul D. Clement filed an amicus brief opposing any move that would make it easier for shareholders to sue third parties that did business with a company accused of fraud. "Words or actions by a secondary actor that facilitate an issuer's misstatement but are not themselves communicated to investors, simply cannot give rise to reliance (and thus primary liability in a private action)," Clement's filing said. SIFMA President and CEO Marc Lackritz said, "If the scope of class action lawsuits is unnecessarily and improperly expanded just to capture deep-pocketed third parties, then litigation, transaction, and compliance costs would soar -- squeezing bottom lines for companies in the U.S. and deterring foreign investment -- at the expense of the American economy, its workers and investors."
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