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Law Firms Examine the Janus Decision

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.