State ex rel. McGraw, Attorney General v. Bear, Stearns & Co. (concurring)

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No. 32515 State of West Virginia ex rel. Darrell V. McGraw, Jr., Attorney General v. Bear, Stearns & Co., Inc.; Citigroup Global Markets, Inc. (fka Salmon Smith Barney, Inc.); Credit Suisse First Boston LLC; Goldman, Sachs & Co.; Lehman Brothers, Inc.; Merrill Lynch; J. P. Morgan Securities, Inc., Morgan Stanley & Co., Inc.; UBS Warburg, LLC; and U. S. Bancorp Piper Jaffray, Inc. FILED July 12, 2005 Starcher, J., concurring, in part, and dissenting, in part: released at 3:00 p.m. RORY L. PERRY II, CLERK SUPREME COURT OF APPEALS OF WEST VIRGINIA I concur with the majority opinion to the extent that the Attorney General s authority is apparently limited in the underlying case by the fact that the defendants below had already reached a global settlement of securities law violation charges with the West Virginia auditor as a party to the settlement. Under various equitable principles estoppel, etc. this settlement probably inures to some degree to the defendant s benefit. I also concur with the majority in recognizing the primary authority of the Auditor to regulate the legitimate business of the sale of securities in our State. I part company with the majority opinion to the extent that it might be erroneously construed to shield obvious consumer scams that masquerade as selling securities from the Attorney General s scrutiny. An example: an ad in the paper selling purported shares in a non-existent gold mine. This is not misconduct by a bona fide securities dealer. It s a clear consumer scam, and, of course, the Legislature intended the Attorney General s Consumer Protection Division to prosecute such scams. Accordingly, I concur, in part, and dissent, in part.

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