The Bush administration is unlikely to support shareholders in a U.S. Supreme Court appeal that aims to hold other companies and investment banks accountable when their actions aid corporations in fraud, a class action law firm said on Monday. Dan Newman, a spokesman for the firm representing Enron shareholders, Lerach Coughlin, said the Securities and Exchange Commission wrote a draft legal brief supporting shareholder plaintiffs in the appeal that is relevant to Enron's 2001 collapse. However, Newman said Solicitor General Paul Clement, who acts as the U.S. government's chief lawyer in Supreme Court appeals, was unlikely to support the regulator's view.

A spokesman for the Justice Department said he could not comment on matters of pending litigation.

In the appeal case before the Supreme Court, shareholders of Charter Communications Inc. (CHTR.O: Quote, Profile, Research sued Scientific Atlanta and Motorola Inc. (MOT.N: Quote, Profile, Research, accusing them of aiding a scheme to inflate Charter revenues in 2000. A lower court dismissed the case, saying that companies were not liable because they were not primary players in the alleged fraud.

Enron shareholders are closely watching the case because it could affect their own attempt to sue banks, including Merrill Lynch & Co. (MER.N: Quote, Profile, Research, for helping put together financing transactions for Enron before its collapse.

Legal briefs supporting the plaintiffs in the Charter case are due at the Supreme Court by midnight on Monday.

Newman said he and other investor advocates started hearing late last week that the solicitor general would not support the SEC's position.