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AAJ Asks Commissioner Cox and the SEC to Come Clean
Files FOIA Request to Determine Ties between SEC Political Appointees and Wall Street Bank Defendant in Enron Shareholders’ Suit

Friday, January 12, 2007 (Washington, DC)—The American Association for Justice (AAJ) has asked Securities and Exchange Commission (SEC) Chairman Chris Cox and General Counsel Brian Cartwright to publicly disclose their ties to Merrill Lynch & Co. amid news reports that the SEC considered supporting the Wall Street investment bank against efforts by Enron shareholders to hold the Enron banks accountable.

“The SEC is supposed to be the watchdog of Wall Street that protects shareholders, pension funds, and the public’s confidence in the integrity of the markets,” said AAJ Chief Executive Officer Jon Haber. “In light of the troubling reports that the SEC, at the request of a major Wall Street bank involved in the Enron scandal, considered interceding in a way that could harm shareholders the public has a right to know if the fox is guarding the hen house. This is just the latest in a series of audacious moves by some in corporate America to roll back the Enron reforms and avoid accountability.’’

AAJ submitted a Freedom of Information Act request to the SEC on January 12, 2007, asking the SEC to reveal if and how they have communicated with Merrill Lynch on the Enron matter, and whether Chairman Cox and Counsel Cartwright have recused themselves from the case since both at one time worked for Latham & Watkins, a law firm that represents Merrill Lynch. In addition, according to the Center for Responsive Politics, while Cox was a member of Congress, Latham & Watkins was his top contributor, giving $124,594 — twice that of his second highest contributor.

Enron shareholders, with the support of at least 30 states, have filed suit against several investment banks, including Merrill Lynch, maintaining they should be held responsible as participants in an accounting fraud stemming from the Enron scandal.

Merrill Lynch attorneys recently asked the SEC to file a brief in support of the firm before the U.S. Fifth Circuit Court of Appeals in New Orleans (Case No. 06-20856). According to a December 21, 2006, Associated Press story, the financial watchdog agency was considering complying with the request, even though it was successful in winning tens of millions of dollars from Merrill Lynch, JP Morgan Chase & Co. and Citigroup Inc. over their role in the 2003 Enron scandal.

The recent news reports regarding the SEC are the latest in a series of efforts by Corporate America to avoid accountability and roll back the Enron reforms, including: the Committee on Capital Markets Regulation’s proposal to remove the right of shareholders to hold public companies accountable for fraud; calls by the U.S. Chamber of Commerce and others to amend the Sarbanes-Oxley Act; and the SEC’s efforts to limit disclosure and transparency requirements for public companies.

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As the world's largest trial bar, AAJ (formerly known as the Association of Trial Lawyers of America) promotes justice and fairness for injured persons, defends the constitutional right to trial by jury, and strengthens the civil justice system through education and disclosure of information critical to public health and safety. Serving members worldwide, AAJ provides attorneys with the information and professional assistance they need to serve clients successfully and protect the democratic values of the civil justice system. Visit http://www.justice.org