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Full Transcript of the Janus Supreme Court Arguments

On December 7, the parties to the Janus Capital Group v. First Derivative Traders case presented their oral arguments before the U.S. Supreme Court.  Litigants are asking the Court to address two key questions about this case:

  1. Whether a service provider can be held primarily liable in a private securities-fraud action for "help[ing]" or "participating in" another company's misstatements; and
  2. whether a service provider can be held primarily liable in a private securities-fraud action for statements that were not directly and contemporaneously attributed to the service provider.

The legal questions here are about the extent to which false or misleading public statements can be attributed to affilates or parents of a fund's adviser. In the words of the Fourth Circuit Court:

Here, the allegedly misleading statements about market timing appearing in the Janus funds prospectuses are unquestionably public. The real question is whether these statements were sufficiently attributable to JCG and JCM. While the prospectuses did not explicitly name JCG and JCM as the drafters, plaintiffs nevertheless allege in their complaint that JCG and JCM may be held responsible for the statements in the prospectuses because "as a practical matter [JCM] runs" the Janus funds, defendants disseminated the prospectuses on a joint Janus website and, consequently, the public would attribute the misstatements in the prospectuses to defendants.

For those of you who are interested in the ins and outs of the legal arguments, the full transcript of the December 7 arguments, including questions from the Court, and answers from the litigants is available at:  http://www.supremecourt.gov/oral_arguments/argument_transcripts/09-525.pdf 

Those who are interested, but do not want to wade through the legal jargon and minutiae, the Forum will present a webinar on December 16 at 2:00PM EST laying out the arguments of both sides of the case, and discussing the case's potential effects on the fund industry.   This webinar is open to all mutual fund industry professionals. Registration is free for Forum members, and $100 for non-members.

To register for this event online, please visit http://www.mfdf.org/events/event/webinar_janus_update/, click on the "Register" button, and complete the required information.  

You may also register by contacting the Forum directly at 202.507.4488 or electronically at:  http://www.mfdf.org/contact_mfdf/