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December 8, 2022

Full Ninth Circuit to Hear Argument on Corporate Tactics for Evading Accounting Under Federal Securities Law

WASHINGTON, D.C.— Stephen Hall, Legal Director and Securities Specialist, issued the following statement in connection with the upcoming oral argument in Lee v. Fisher, case number 21-15923 in the United States Court of Appeals for the Ninth Circuit:

“On Monday, December 12th, the Ninth Circuit, sitting en banc, will hear oral argument in Lee v. Fisher.  At stake is nothing less than the ability to hold corporate management accountable under the federal securities laws.  If the defendant (The Gap) prevails, it will have effective immunity in nine states and two territories for misleading or inaccurate proxy statements—by doing nothing more than amending its own corporate bylaws.  Even worse, The Gap or other corporations will likely adopt more bylaws to undercut a wider range of shareholder suits under federal law, or even preempt federal suits under other laws protecting marketplace competition, pensioners, and more.  The Ninth Circuit must curb these tactics, just as the U.S. Court of Appeals for the Seventh Circuit has done.

“Monday’s argument will undoubtedly dive into the legal minutiae behind the case.  But neither the court nor the public should lose sight of the basic issue here: Should The Gap’s senior management have the power to decide whether they must face shareholder suits to enforce federal law? Obviously, Congress never intended corporate management to make that call, and the amicus curiae brief of Public Citizen, joined by Better Markets and Consumer Federation of America, makes that conclusion clear.

“Ultimately, we look forward to a decision from the Ninth Circuit—with the full voice of its en banc court—affirming the importance of accountability under federal securities laws.”


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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