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November 15, 2022

Better Markets Joins Amicus Curiae Brief to Stop Corporate Evasion of Liability under Federal Securities Law and Other Statutes

WASHINGTON, D.C.— Stephen Hall, Legal Director and Securities Specialist, issued the following statementin connection with yesterday’s filing of an amicus curiae brief, led by Public Citizen and joined by Better Markets and the Consumer Federation of America, in Lee v. Fisher, case number 21-15923 in the United States Court of Appeals for the Ninth Circuit:

“As explained in our brief, corporations cannot be allowed to insulate themselves from liability under the federal securities laws with the stroke of a pen in their by-laws.  Lee v. Fisher will determine whether The Gap and other large corporate entities can do just that, in this case by amending their bylaws to include a forum selection clause that forces any derivative actions into state court.  The problem is that federal law limits many claims under the securities laws to federal court, so this maneuver prevents those claims from being heard at all.

“The bottom line if that if the full Ninth Circuit does not reverse the decision of the district court, corporate management will have a clear path to extinguishing shareholder derivative suits under the federal securities laws over inaccurate or misleading proxy statements.  The integrity of those proxy statements is important, as they have a powerful influence on shareholders who must decide how to vote their shares and steer corporate governance policies. And derivatives suits, which are claims on behalf of a company that has been harmed by those who run the firm, are an important tool for addressing fraud and abuse.

“If The Gap’s argument is successful, the public will lose a critical tool for holding management accountable for serious misconduct, as evidenced here by misstatements about corporate diversity initiatives and by earlier litigation over the Wells Fargo fake-account scandal.  And the damage won’t stop there—many other types of federal remedies are threatened with extinction by companies adding corporate by-laws that in effect nullify the right of investors and consumers to seek relief under a variety of federal statutes.  We have therefore joined our allies in urging the Ninth Circuit to correct the lower court’s decision.

“We are grateful to Public Citizen for their leadership in crafting a persuasive brief that highlights the legal flaws in the lower court’s decision and the adverse impact it will have on investors and consumers if not reversed by the full court.  We look forward to seeing the fruits of these efforts in a future Ninth Circuit decision.”


Better Markets is a non-profit, non-partisan, and independent organization founded to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies—including many in finance—to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit

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