New York, January 23, 2008—The United States Supreme Court has declined to hear an appeal of the victory secured by Shearman & Sterling litigators before the United States Court of Appeals for the Fifth Circuit on behalf of Merrill Lynch with respect to Enron. The Fifth Circuit decision reversed a district court’s order certifying a class of Enron investors who were seeking $40 billion in damages from the defendants.

Today’s victory before the Supreme Court follows closely in the wake of the United States Supreme Court’s recent decision in Stoneridge Investment Partners, LLC v. Scientific-Atlanta, Inc. that rejected “scheme” liability as a means of expanding the scope of primary liability under the federal securities laws to sweep in a new class of defendants who do business with companies that are later found to have misrepresented their financial condition. Shearman & Sterling litigators submitted an amici curiae brief in the Stoneridge case on behalf of the Organization for International Investment, International Chamber of Commerce, and Federation of German Industries. In its opinion, the Supreme Court relied on Shearman & Sterling’s brief, explaining that the Court rejected “scheme” liability because, among other things, to hold otherwise would mean that “[o]verseas firms with no other exposure to our securities laws could be deterred from doing business here.”

The Shearman & Sterling attorney team included partners Stuart Baskin, Herbert Washer and Adam Hakki, counsel Kirsten Cunha, and associates Seth Kean, Kristen Fitzmaurice, Christopher Fenton, Daniel Lewis, Colleen Carey, and Brian McElroy; all are in the Litigation Group in the New York office.