US-quoted UK companies may face legal onslaught

The result of a US Supreme Court trial could see British companies dragged
through the courts for having business links with companies that submit false
accounts. This suggests that UK corporates quoted on the New York stock
exchange, will be at much greater risk of litigation, because of their focus on
US operations.

The situation rests on the outcome of the case involving Scientific-Atlanta,
an electronics supplier being sued by Stonebridge Investments for its links with
Charter Communications, a cable TV provider, between 1999 and 2002.

the investors claimed that Scientific-Atlanta was involved in ‘sham
transactions’ designed to inflate the Arthur Andersen-audited company’s
cashflow by $17m (£8.5m).

Under current law, any company that issues shares in the US is liable for big
class-action compensation pay-outs if they file false accounts or mislead their

On the back of the current case, the US Supreme Court is now considering
whether any other third-party supplier, legal firm, accountant or bank that
works with the offending company should face claims from defrauded investors and

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