California State Teachers’ Retirement System

“ F. THE EIGHTH CIRCUIT’S ANALYSIS WILL DAMAGE THE INTEGRITY OF THE MARKETPLACE
If the Eighth Circuit’s decision is upheld, there will be serious negative consequences for the financial markets and investors. Investor confidence would be undermined, which would itself lead to a downturn in and flight from the capital markets. Congress expressly recognized the importance of private securities litigation—which it deemed an "indispensable tool"—in helping to "’promote public and global confidence in our capital markets" by helping to deter wrongdoing. ”

“ Under the Securities and Exchange Commission’s proposed rule, primary liability is described as follows:
Any person who directly or indirectly engages in a manipulative or deceptive act as part of a scheme to defraud can be a primary violator of Section 10b-5 and Rule 10b-5 (a) ; any person who provides assistance to other participants in a scheme but does not himself engage in a manipulative or deceptive act can only be an aider and abettor. ”

“ Enron, in which the Regents of the University of California as lead plaintiff secured over $8 billion in recovery for shareholders.
Worldcom, in which the New York State Common Retirement Fund secured over $6 billion in recovery for shareholders. ”