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SEC Seeks to Curtail Investor Suits: New York Times

The U.S. Securities and Exchange Commission has taken steps on two fronts to protect corporations, executives and accounting firms from investor lawsuits that accuse them of fraud, the New York Times reported in a story published on Tuesday.

Last week, the commission filed a brief in the Supreme Court urging the adoption of a legal standard that would make it harder for shareholders to prevail in fraud lawsuits against publicly traded companies and their executives, the paper said.

At the same time, the agency's chief accountant told a conference that it was considering ways to protect accounting firms from large damage awards in cases brought by investors and companies, the paper said.

Christopher Cox, the commission's chairman, said in an interview that both efforts were in the best interests of investors, because they aimed at preventing the accounting industry from further consolidation and at limiting what he called "fraudulent lawsuits," including some he said were filed by "professional plaintiffs," the Times said.

The SEC was not immediately available to comment.

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