• Supreme Court Limits Scope of Rule 10b-5 “Maker” Liability
  • June 17, 2011 | Authors: John A. Freedman; Richard L. Jacobson; Scott B. Schreiber; James W. Thomas; Michael D. Trager
  • Law Firm: Arnold & Porter LLP - Washington Office
  • On June 13, 2011, in Janus Capital Group, Inc, et al. v. First Derivative Traders, No. 09-525, a divided Supreme Court held 5-4 that only the speaker to which a statement is specifically attributed can be liable for purposes of Securities and Exchange Commission (SEC) Rule 10b-5. The majority opinion by Justice Thomas announced a bright-line rule that “the maker of a statement” for purposes of Rule 10b-5 liability “is the person or entity with ultimate authority over the statement, including its content and whether and how to communicate it.” A sharp dissent by Justice Breyer questioned the majority’s interpretation and expressed concern that the majority opinion foreclosed claims against too broad a range of potential defendants under the securities laws. www.arnoldporter.com