Earlier this month, the Supreme Court announced its decision in the Janus Capital Group v. First Derivative Traders case. The Court decided in favor of Janus, holding that Janus prevails because, though Janus may have been significantly involved in preparing the statement in question, it is dispositive that it did not "make" the statement because it did not have ultimate control.
For purposes of Rule 10b–5, the maker of a statement is the person or entity with ultimate authority over the statement, including its content and whether and how to communicate it. Without control, a person or entity can merely suggest what to say, not “make” a statement in its own right. One who prepares or publishes a statement on behalf of another is not its maker.
The decision has left many wondering about the lasting effect it may have on private actions under Rule 10b-5, and how the decision may affect funds, advisers, and boards. To help put the decision in perspective, and also to help provide some ideas about what it may mean for the future, we have assembled (in no particular order) a collection of law firm client memoranda discussing the case and its implications.
- Ropes & Gray, Supreme Court Forecloses Primary Liability for Secondary Actors in Securities Offerings
- Gibson Dunn, U.S. Supreme Court Clarifies the Scope of Private Liability Under Rule 10b-5
- Blank Rome LLP, Supreme Court Holds Adviser Who Participated in Drafting Statements Did Not "Make" Them for Purposes of Rule 10b-5 Liability
- Dechert LLP, The United States Supreme Court Declines to Expand the Scope of Primary Liability under Rule 10b-5 to Services Providers Who Do Not Have Ultimate Authority Over Statements
- Stradley Ronon LLP, Supreme Court Limits Primary Liability Under Rule 10b-5
- Wilkie Farr & Gallagher LLP, Supreme Court Holds that Rule 10b-5 Must Be Construed Narrowly
- Cooley LLP, Supreme Court Limits 10b-5 Liability to Companies and Company Officials Making Statements to the Market
- Greenberg Taurig, U.S. Supreme Court Limits Liability Under Rule 10b-5
- King & Spalding, U.S. Supreme Court Decision May Limit Scope of Persons Who Can Be Primarily Liable for Securities Fraud Under Rule 10b-5
- Morrison & Foerster LLP, United States: U.S. Supreme Court Limits Reach Of Primary Liability In Securities Fraud Cases
- Proskauer Rose LLP, Supreme Court Narrowly Defines Those Who "Make" Actionable Statements Under Rule 10b-5
- Drinker Biddle & Reath LLP, Divided Supreme Court Rules In Favor Of Adviser In Prospectus Disclosure Case
- K&L Gates LLP, The Supreme Court's Janus Decision: No Secondary Liability, but Many Secondary Questions